3
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): June 22, 2000
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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 Events
Alcatel Vendor Financing Facility. On June 22, 2000, we closed our
vendor financing facility with Alcatel. Under the terms of the facility, Alcatel
agreed to finance up to $175 million of the costs of our acquisition of
telecommunications equipment and design, engineering, installation and testing
services for the deployment of our pan-regional high bandwidth metropolitan area
network. Alcatel has operations in over 130 countries and annual revenues of
over $22 billion, and is a world recognized builder of next-generation
telecommunications networks.
When it is completed, the network will cover 17 cities in Mexico,
Venezuela, Guatemala, El Salvador, Costa Rica and Panama. The network will be
designed as a "pure" Internet Protocol system for the delivery of both data and
voice.
The amounts Alcatel finances will be structured as three separate loans
(covering our three basic marketing areas). We made our first draw under the
facility at closing, and we will be able to make further draws through June 30,
2002. We will be required to repay the principal amounts we draw in quarterly
installments, commencing 30 months from the closing date. The final maturity
date for the facility is in January, 2007. We will pay interest on all amounts
we borrow at a rate that we believe is competitive.
We will be required to make mandatory prepayments on the drawn amounts
from certain refinancings we obtain, from a portion of our excess cash flow,
from a portion of any insurance payments (above certain thresholds) and from the
sale of our assets.
The loans from Alcatel are secured by a comprehensive security package
that the parties are completing which includes
o A pledge of our stock and other equity interest in our
subsidiaries;
o A first and perfected security interest, to the extent permitted
by law, in our licenses and permits for the operation of our
networks or systems;
o A security interest in our equipment, supplies, inventory and
other personal property;
o An assignment, for security purposes, of our material contracts;
and
o A security interest in our accounts receivable.
At the closing of the facility, we paid Alcatel a commitment fee and an
arrangement fee, and issued an affiliate of Alcatel warrants (together with
registration rights) in an amount which we believe are consistent with fees and
equity interests payable to large vendors for similar transactions.
In connection with the closing of the facility, and at Alcatel's
request, we restructured certain of our operations by creating a new,
wholly-owned subsidiary, Latin American Broadband, Inc. ("LAB"). Our parent
corporation, Convergence Communications, Inc., transferred essentially all of
its operations and assets to LAB, and then Convergence Communications, Inc.
pledged its shares in LAB to Alcatel as part of a security package for the
Alcatel loans.
For a more detailed description of the Alcatel facility, and the
corporate restructurings we effected in connection with its closing, see our
Annual Report on Form 10-KSB for the period ending December 31, 1999, and our
Information Statement on Schedule 14C dated May 22, 2000.
Settlement of Certain Litigation. Effective July 5, 2000, we settled
our arbitration proceeding against Donald Williams. Under the terms of the
settlement agreement, Mr. Williams and certain of his affiliates returned the
shares they acquired in 1997 in our parent corporation, Convergence
Communications, Inc., when we purchased our interests in Caracas Viva Vision
T.V., S.A. ("CVV") and Communicaciones Centurion, S.A. ("Centurion"), and we
returned the shares we acquired in CVV and Centurion to Mr. Williams and his
affiliates. We believe the settlement was in our long-term best interest. For a
more detailed description of the arbitration proceeding and the value we
attributed to our interests in CVV and Centurion, see our Annual Report on Form
10-KSB for the period ending December 31, 1999.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired. N/A
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(b) Pro Forma Financial Information. N/A
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(c) Exhibits. N/A
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CONVERGENCE COMMUNICATIONS, INC.
By: /s/ Jerry Slovinski
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Jerry Slovinski, Chief Financial Officer
Dated: July 7, 2000
