FORT LAUDERDALE, Fla., Sept. 4, 2002 (PRIMEZONE) -- CarCorp USA (OTCBB:CUSA) Chairman and CEO, Michael DeMeo today announced that Carcorp had received and accepted a commitment of $5,000,000 of funding from Europe in the form of secured convertible debentures, which will fund in a series of tranches between now and the end of September, 2002. Ravilon Finance of Geneva, Switzerland is leading this European institutional funding.
The convertible debentures will bear an interest rate of 7.2%, payable monthly over five years, and will be secured by certain assets of the Company. The Company retains the option to redeem the debentures, at any time, at a cost of one hundred twenty percent of face value, plus accrued interest. The debentures, at the election of the holders, are convertible into the Company's restricted stock at $1 per share, subject to registration rights after 180 days from the date of closing. If the conversion option is not exercised by the holders, or the debentures are not redeemed during the five-year term, the debentures will automatically be converted into the Company's common stock at the end of five years at a price per share equal to eighty percent of the thirty-day average bid price.
"We are pleased with this investment, led by Ravilon Finance of Geneva. It allows us to expand our operations rapidly to take advantage of the demand for financing that is presently going unfulfilled. The equity nature of these debentures will support our efforts to increase our senior warehouse lines of credit by twenty million dollars and thereby allow us to double our gross income, EBITDA and net after-tax profits during the next 12 months. A portion of the proceeds will actually be used in Europe to support certain acquisitions and operations that we are now actively pursuing."
As part of this overall funding commitment, the Company will seek an immediate listing on the Frankfurt Exchange for its existing common shares and the shares underlying the conversion feature of the debentures. The Company anticipates that this listing should result in a rising stock price since the float traded in the United States will be partially absorbed in Germany, as well as the overhang caused by the potential conversion of the debentures. Such listing should occur no later than October 31, 2002.
Forward Looking Statements:
Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Litigation Reform Act of 1995. The company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release, the Company will appropriately inform the public.
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