WebTech Wireless Provides Details on ABCP Exposure: Loss to Have Minimal Impact on Liquidity and Cash Flow
Vancouver, British Columbia –– Friday, April 25, 2008 –– WebTech Wireless Inc. (TSX: WEW), a leading provider of location-based and fleet Telematics services, today announced that it is holding $6 million of Asset Backed Commercial Paper (“ABCP”) in SIT Trust III, Series A Notes. As a result of the Montreal Accord and the result of certain Crawford Commission driven court proceedings recently decided in the Ontario Superior Court, the Company expects to receive new notes (“Settlement Notes”) in exchange for its existing SIT III Series A Notes.
The Company anticipates that the Settlement Notes will include three classes of notes having the following par values of the SIT III Series A Notes; Class A1 and A2 Senior Notes - 93.4%; Class B Notes - 3.6%; and Class C Notes – 3%. The extent to which the Company may suffer a loss on the Settlement Notes is difficult to quantify. The Company estimates, based on these figures, it will suffer a loss of at least $186,000 being the par value the Class C Notes (which are projected to have little or no market value), as well as a loss of previously accrued interest on the SIT III Series A Notes of approximately $140,000. In addition, the Company will book a yet to be determined “Mark to Market” loss upon issuance of the Settlement Notes, the immediate trading value of which it is unable to estimate at this time.
“Until now, we have relied on written and verbal representations from the brokerage firm which sold us this paper that we would be safe from any loss on this investment,” said Scott B. Edmonds, CFO of WebTech Wireless. “It has now become apparent that we can no longer rely on these assurances. Given our belief that we would be made whole by our broker and thus avoid any loss we have not previously announced this matter. We will provide additional information regarding the value of our ABCP as we are able and as we continue our conversations with our auditors and lawyers. For the time being however, we have more than sufficient liquid assets to meet our short and long term needs.”
The Company last week filed a Motion with the Ontario Superior Court to be excluded from the Creditor Release proposed under the Montreal Accord, and is considering further legal actions against Canaccord Capital, the brokerage firm which sold the Company this investment.
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About WebTech Wireless Inc.
WebTech Wireless Inc. (TSX: WEW) is a global Telematics, location-based services provider that develops, manufactures, and delivers turnkey wireless solutions designed to improve productivity and profitability. WebTech Wireless products include wireless hardware and software services running on cellular and satellite networks, and include Automatic Vehicle Location, Mapping, Reporting, Vehicle Diagnostics, Driver Status, In-vehicle Telemetry, Messaging, In-vehicle Navigation, and wireless application and Internet connectivity. WebTech Wireless is currently providing devices and services worldwide in eight languages to over forty-one countries covering five continents. WebTech Wireless’ scalable solutions are used by a broad range of small, medium and Fortune 500 companies and by governments. For more information, please visit .
www.webtechwireless.com
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For further information on WebTech Wireless, please contact:
Press / Media Contact:
(+1) 604-419-8137, press@webtechwireless.com
Investor Relations Contact:
R. Joe Dhami
(+1) 877-811-4518 ext. 462,