EXHIBIT A
PRESS RELEASE
Denver, Co. November 1, 2000. TV Communications Network, Inc. ("TVCN")
announced today that it has supplemented and revised its July 31, 2000,
announcement that its wholly-owned subsidiary, Reema International
Corp., entered into an agreement with a private recommended lender, the
identity of which remains confidential pursuant to a request for
confidentiality TVCN filed with the U.S. Securities and Exchange
Commission's Office of the Secretary. The agreement provides that the
recommended lender has made a non-binding commitment to provide
additional funding of $150 million for Reema's Project in Trinidad, Latin
America.
On May 18, 2000, TVCN announced that the same entity had agreed to
provide the first $150 million for Reema's proposed Project in Trinidad.
The Project entails the construction and operation of a Gas-To-Liquids
("GTL") Plant.
The recommended lender is entirely independent of Reema International,
TVCN and any affiliate thereof. As of the date of this document, the
proposed loan has not closed and there can be no assurance that the
proposed loan will in fact close. The proposed loan is for a twenty year
period and carries an interest rate tied to the London Inter Banking
Operation Rate. TVCN paid all of the costs and expenses associated
with procuring this proposed loan including two separate loan origination
fees of $150,000 each.
According to the US Environmental Protection Agency, one of the
major causes of pollution in most cities around the world is the
content of sulfur, aromatics and other contaminants found in the
products generated from crude oil. On August 27, 1998, UPI reported
that "California has become the first state to declare that soot
emitted in (crude-oil based) diesel exhaust is a cancer threat that
requires new controls." In 1998, The California Air Resources Board
"voted unanimously to declare 40 chemicals found in (such) diesel
exhaust as toxic air pollutants." Early in May, 2000, the Federal
National Toxicology Program added diesel exhaust particulates to its
list of chemicals that are "reasonably anticipated to be a human
carcinogen. Cancerous tumors have been found in rats after exposure
to (crude-oil based) diesel exhaust."
Omar A. Duwaik, Chairman of both TVCN and Reema, explained, "most
countries around the world will, sooner or later, adopt more stringent
pollution standards. Refiners can meet the new standards by the addition
ofcostly equipment, or by purchasing and blending GTL products which
would require no additional capital investment. This may create a
market demand for millions of barrels/day of GTL products. Thus,
the 10,000 bbl/d of the proposed GTL Plant is projected to be in
great demand by many refiners worldwide."
Duwaik believes that "GTL is the wave of the future in gas
applications." Reuters had reported from London on June 28, 1998,
that "advances in converting natural gas into clean environmentally
friendly oil products could trigger revolutionary changes in the
world energy industry." Arthur D. Little, a global consulting firm,
was more emphatic, "GTL will revolutionize the gas industry the way
the first LNG Plant did 40 years ago."
"Because of the high quality of the diesel that will be produced at
the proposed Plant," remarked Reema' President, Glen Clark, "it can
be used as a blend with crude-oil based diesel for upgrading purposes,
and to meet the ever-increasing stringent environmental standards."
According to National Petroleum News, the GTL product will be in great
demand "because it solves formidable clean air problems, crucial in the
United States and other environmentally sensitive countries. Use of the
no-sulfurfeedstocks will save refiners billions of dollars in investment
they would (otherwise) have to make to reduce sulfur in motor fuels."
The original, non-binding commitment contained the specific arrangements
regarding compensation to the proposed lender as follows:
Total Amount of Funding - $150,000,000 USD.
Funding Schedule - Total proceeds of the loan will be placed in a "High
Yield Investment" program in a major European Bank. The project will be
funded at the rate of $3,750,000 per month for Forty (40) months, by
way of irrevocable pay-orders lodged with a designated Disbursing Bank.
The recommended lender will provide collateral to the Investment Account
Bank.
Interest - Beginning Forty-one (41) months after the first disbursement
of funds and thereafter for the Twenty (20) year term, the Borrower will
be obligated to pay Interest quarterly at a rate not to exceed one (1)
year LIBOR plus 1and 1/2 % adjusted annually. These interest payments will be
based on the amount actually disbursed to the Borrower or its assigns, plus
unpaid accrued interest, before deduction of the recommended lender's fee.
Disbursement - In accordance with the loan documents, a "Fund Control" to
insure progress and payment as agreed, will be required. The Disbursing
Bank will act as trustee, responsible for administration, accounting and
adherence to the project cost breakdown, verifying all inspection reports
and requests for loan disbursements accompanied by supporting invoices and
releases. They will also diligently maintain recommended lender priority
and compliance in accordance with the "Fund Control" and loan documents.
Repayment of Principal - Principal amount of loan ($150,000,000 USD plus
accrued unpaid interest) will be subject to repayment in the following manner:
The Borrower will provide the recommended lender with acceptable evidence that
all phases of the project complies with any and all Governmental and regulatory
agencies necessary and needed to render the project lawful and approved.
Upon conversion to permanent financing, the value of the Project will be
established by an independent appraisal through a licensed and certified
appraiser. At all times, the appraised value of the Project and the Borrower
or Borrowing entity must at least equal the amount disbursed. The Loan
will be all due and payable at the end of
Twenty (20) years or can be paid at any time during the Twenty (20) year
period without penalty. (The loan is not assumable nor may it be assigned
without prior recommended lender approval. In the event of a sale of
any portion of the Project, a pro rata repayment of principal will be due
and payable.) After the third (3) year of operations a Sinking Fund must be
established, the annual deposits to which must be adequate to liquidate the
principal by the end of the Twenty (20) year period. The sinking Fund can
be established in a Bank of our choice under the joint administration of
the Borrower and the recommended lender.
Collateral - The recommended lender will provide collateral for the
opening Forty (40) months or until the Borrower no longer has an
active Investment Account. Collateral will be extended as a result of
subsequent loan approvals. Fifteen (15) days prior to the scheduled
return of collateral to the recommended lender, the Borrower will submit
detailed Financial Statements (less than 30 days old), P&L Statements,
General Ledger and Owned Inventory Schedule (w/ opinion letter) to the
recommended lender for recommended lender approval as substitution of
collateral. Typically the collateral will consist of a first lien
position on the land and associated property of the Project, and possibly
a lien on other assets of the Borrower and/or its affiliated companies,
depending on the financial strength of the Company at that time. The
recommended lender's fees for the completion of the funding will be 2%
of the amount funded to the Borrower, payable as the Borrower receives
funds; i.e., as the Borrower is funded over a period of 40 months, the
recommended lender will receive a total of 2% of the initial
$3,750,000 USD and 2% of each $3,750,000 increment funded thereafter.
In addition, 1% will be payable to the loan broker, and deducted from
each increment as it is funded. In the event that the Company does
not find it necessary to draw down the entire loan of $150,000,000
USD, the 2% fee on the amount not taken down will be due and payable
along with the first interest payment.
On or about July 13, 2000, in response to Reema's request to increase
the loan amount from $150,000,000 to $300,000,000, the recommended
lender amended the May 2000, agreement. Per the amendment, the loan
amount was increased from $150,000,000 to $300,000,000 and the retainer
amount was increased from $150,000 to $300,000. On behalf of Reema,
TVCN paid the second portion of the $300,000 retainer fee.
On July 31, 2000, Reema received confirmation of amendment from the
recommended lender that the "Funding Proposal" dated May 8, 2000, was
amended to reflect the Company's request.
On or about June 5, 2000, Reema signed an agreement with Parsons
Energy and Chemical Group, Inc. to commence the engineering, design,
procurement and construction for the proposed gas to liquids plant in
Trinidad. The agreement required Reema to pay Parsons a minimum of
$394,000 of which $314,254 has been paid by TVCN.
Ancillary to the Parsons contract, Reema entered into an agreement
with AIR Products for engineering services. This contract obligates
Reema International to pay AIR $210,000. On behalf of Reema, TVCN
paid AIR $84,000 during fiscal year 2000.
Since the occurrence of these events and transactions and during
fiscal year 2000, Reema has continued to identify potential recommended
lenders for financing the gas to liquids plant. Although no loans
have closed, Reema has procured non-binding agreements from several
potential recommended lenders. In order to obtain these non-binding
agreements, TVCN has paid a total of $512,500 to potential finders
(none of which is an affiliate of TVCN or any of its affiliates) as
loan origination or finder fees.
During calendar year 2000, to date, Reema has incurred expenses
associated with the gas to liquids project including legal expenses
of $93,978, travel expenses of $36,566 and administration expenses
including labor and consulting fees of $438,115. TVCN has paid
these expenses on behalf of Reema in addition to the previously
mentioned fees and costs.
TVCN is a publicly-traded company on the Electronic Bulletin Board
under the symbol "TVCN". In addition to the gas and oil business,
TVCN is involved in wireless microwave communications. For more
information contact Kenneth D. Roznoy at 3037516100 or Fax 3037511081.
This document is intended for informational purposes only. It
contains "forward looking" statements as defined by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. They reflect
management's beliefs and estimates of future economic circumstances
and industry conditions. Actual results may differ materially from
those projected. Investing in low-priced stock such as that of TVCN
is very risky and is not suitable for everyone. The Company's
performance, business plans, projections and financial results are
not guarantees of future performance or that any of the projections
or expectations could or will ever be met.
