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PTGi Completes Sale Of Australian Operations For $AUD 192 Million
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Friday, June 01, 2012:
Primus Telecommunications Group, Incorporated (PTGi) (NYSE: PTGI), a global facilities-based integrated provider of advanced telecommunications products and services, announced today that it has completed the previously announced sale of its Australian operations to M2 Telecommunications Group Ltd (M2) for approximately $AUD 192.4 million1, or approximately $US 195.7 million2.
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From the transaction proceeds, approximately $US 9.8 million has been placed in an indemnification escrow in the event that there are indemnification claims by M2 following the closing. Escrowed amounts will be distributed to PTGi at a later time to the extent not used for indemnification claims by M2. The sale is expected to generate a taxable gain, which PTGi expects to be substantially offset with available tax losses. The transaction proceeds are not subject to repatriation tax.
With the transaction's closing, and subject to the terms and requirements of the indenture governing PTGi's 10% notes, the board of directors will be considering appropriate uses for the proceeds, among which may be capital investments, note repurchases or redemptions, special dividends and share repurchases.
The transaction was approved by the PTGi Board of Directors and the special committee of the Board of Directors previously established to explore and evaluate strategic alternatives to enhance shareholder value. PTGi's special committee continues to explore and evaluate strategic alternatives, which may include (but may not be limited to) a sale, merger or other business combination involving PTGi, a joint venture arrangement, the sale or spinoff of other PTGi assets or one or more of its other business units, or the execution of PTGi's business plans for its other business units.
PTGi does not intend to provide updates or make any further comments regarding the evaluation of strategic alternatives, unless the Board of Directors has approved a specific transaction or otherwise deems disclosure appropriate. PTGi has not set a timetable for completion of its overall evaluation process or made a decision to pursue any other transactions, and there can be no assurance that any other transactions will be pursued or completed. Jefferies & Company, Inc. is acting as exclusive financial advisor to the special committee of the Board of Directors of PTGi.
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