UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): NOVEMBER 16, 1999
CONVERGENCE COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
NEVADA 00-21143 87-0545056
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
102 WEST 500 SOUTH, SUITE 320, SALT LAKE CITY, UTAH 84101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (801) 328-5618
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WIRELESS CABLE & COMMUNICATIONS, INC.
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(Former name or former address, if changed since last report.)
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Item 5. Other Items.
On November 16, 1999, Convergence Communications, Inc. (the "Company")
closed the final portion of a $109.5 million private equity and credit facility
financing package with six accredited investors. The terms of the equity and
credit facility financing package are described in greater detail in the
Company's report on Form 8-K dated November 2, 1999. At the closing, the Company
received $25 million in cash from the sale of 3,333,332 shares of its Series C
Convertible Preferred Stock (the "Series C Stock") to three of the six
accredited investors. Those three parties also acquired options to purchase
1,333,332 additional shares of Series C Stock and warrants to purchase 833,332
shares of Common Stock.
At the closing, one of the parties to the equity financing agreement,
Telematica EDC, C.A., also invested $5.25 million dollars in Chispa Dos Inc.
("Chispa"), a controlled subsidiary of the Company which conducts
telecommunications operations in El Salvador. Telematica acquired approximately
32.64% of the outstanding stock of Chispa in exchange for its investment, and
Chispa used approximately $3.86 million of the proceeds of Telematica's
investment to pay down the principal and interest amounts outstanding under the
promissory note Chispa delivered to FondElec in April 1999 in the original
principal amount of $4,769,497. In connection with Telematica's investment in
Chispa, the Company acquired additional shares in Chispa by contributing to
capital approximately $901,000 of the amounts Chispa owed it. As a result of
these transactions, Chispa is held approximately 32.64% by each of the Company
and Telematica, 27.87% by FondElec and 6.85% by third parties. Under the terms
of the shareholders' agreements for Chispa's operation, the Company maintains
day-to-day control over Chispa's operations and is entitled to elect 50% of
Chispa's directors.
On December 6, 1999, the Company issued a press release which describes
the consummation of the private equity and credit facility agreement. A copy of
the press release is attached hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. N/A
(b) PRO FORMA FINANCIAL INFORMATION. N/A
(c) EXHIBITS. The following exhibit is included in this
filing in accordance with the provisions of Item 601
of Regulation S-K:
99.1 Press release dated December 6, 1999.
CONVERGENCE COMMUNICATIONS, INC.
/S/
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By: Jerry Slovinski, Chief Financial Officer
Dated: December 8, 1999
Contact: Troy D'Ambrosio
Convergence Communications, Inc.
(801) 328-5618
[email protected]
CONVERGENCE COMMUNICATIONS, INC., SECURES TOTAL FINANCING OF
$109.5 MILLION IN PRIVATE EQUITY AND CREDIT FACILITIES
-- U.S. Provider of High-Speed Broadband Services to Latin America
Will Fund Further Infrastructure Enhancements in the Region--
December 6, 1999 - Salt Lake City, Utah - Convergence Communications, Inc., a
leading facilities-based operator of broadband telecommunications networks in
Latin America, announced today that it has secured $109.5 million of private
equity and credit facilities ($83.5 million of private equity and a credit
facility of $26 million). An investor group consisting of Telematica EDC, C.A.,
TCW/Latin America Partners, LLC, FondElec Essential Services Growth Fund, L.P.,
Internexus S.A., the International Finance Corporation and Glacier Latin-America
LTD., participated in this round.
"We are very pleased to have assembled a group of investors that provide the
Company both the capital resources as well as regional and industry knowledge to
continue building Latin America's leading broadband telecommunications company,"
said Lance D'Ambrosio, Chairman and Chief Executive Officer. "This round of
financing will allow the Company to aggressively add customers in our operating
markets and expand the networks to additional markets."
ING Barings managed the private placement and serves as a financial advisor to
the Company.
About Telematica EDC, C.A.:
Telematica EDC is a private company which focuses in the telecommunication
business (data transmission and mobile communication). Telematica EDC is a
subsidiary of Corporacion EDC, C.A. ("CEDC"). CEDC is one of Latin America's
premier companies and concentrates its activities in electricity (Generation,
Transmission and Distribution), telecommunications, water and gas businesses in
the Andean region and Central America.
About TCW/Latin America Partners, LLC:
TCW/Latin America Partners is a private equity fund, which focuses on
investments in Latin America and is affiliated with the TCW Group. Founded in
1971, the TCW Group of companies, including Trust Company of the West, manages
approximately $55 billion in assets for many of America's largest corporate,
public and union pension plans, charitable foundations, endowments and financial
institutions. Headquartered in Los Angeles, California, TCW also maintains
offices in San Francisco, Houston, New York, Hong Kong and London.
About FondElec Essential Services Growth Fund:
The FondElec Essential Services Growth Fund L.P. is managed by the FondElec
Group, a private equity investment firm founded in 1992 to capitalize on the
growth of worldwide emerging market electricity, gas, water and wireless
communications businesses. The FondElec Group has closed over $570 million of
infrastructure investments in emerging markets for funds under management and
co-investors. Investors in the FondElec Essential Services Growth Fund includes
affiliates of CMS Energy Inc., Tomen Corp., the InterAmerican Investment
affiliate of the InterAmerican Development Bank and Bayernwerk, A.G.
-more-
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Convergence Communications /2
About Internexus, S.A.:
Internexus S.A. is a company in Argentina funded by private capital with the
purpose to invest in leading edge technologies.
About the International Finance Corporation:
IFC is the largest multilateral source of loan and equity financing for private
sector projects in the developing world. IFC finances and provides advice for
private sector ventures and projects in developing countries in partnership with
private investors. Since its founding in 1956, IFC has committed more than USD
$21.2 billion in financing for its own account and has arranged USD $15 billion
in syndication and underwriting for 1,852 companies in 129 developing countries.
About Glacier Latin-America LTD.:
Glacier Latin America Ltd., is a private equity fund dedicated to investing in
the Andean Region, Central America and Mexico. The Fund seeks investment
opportunities in companies that require growth capital and experienced
management support to expand in the region. Glacier's management team is
comprised of hand-on proven entrepreneurs who have a long-standing track record
of creating and managing their own portfolio of highly successful ventures. The
Fund has invested in the telecommunications, entertainment, education and quick
service restaurants industries.
About Convergence Communications, Inc.:
Convergence Communications, Inc., is a leading facilities-based,
telecommunications company which owns and operates IP-based, broadband
metropolitan area networks. The Company offers a "one-stop" menu of
telecommunications, data and Internet services to businesses and consumers in
Latin America. The Company has over 10,000 kilometers of fiber optic cable and
provides first-mile broadband connections through a variety of delivery
technologies including fiber optic cable, hybrid fiber coaxial cable and
broadband fixed wireless connections. The Company serves over 30,000 customers
and currently has operations in six Countries - Mexico, Guatemala, El Salvador,
Costa Rica, Panama and Venezuela.
About ING Barings:
ING Barings is the organization and trade name used by ING Bank N.V. and certain
of its subsidiaries for the conduct of its activities in the field of
international corporate and investment banking, including treasury services,
M&A, corporate and sovereign lending, fixed income and equity origination,
trading, sales and research. ING Bank N.V. is part of ING Group, one of the
largest integrated financial services organizations in the world.
# # #
The statements contained in this release that are not purely historical are
forward-looking statements, as defined in section 21E of the Securities Exchange
Act of 1934, and include the Company's beliefs, expectations or intentions
regarding its future operations, acquisitions and financial condition. All
forward-looking statements included in this release are made as of the date
hereof and are based upon information available to the Company as of such date.
The Company assumes no obligation to update any forward-looking statements. It
is important to note that actual outcomes could differ materially from such
forward-looking statements.
