April 27, 2004 Costa Mesa, CA-- GTC Telecom announced that it has entered into an agreement to acquire TelSpan in a tax-free stock swap transaction. TelSpan, a California corporation, owns the rights to acquire out of bankruptcy, the fourth largest fiber optic network in Mexico, consisting of approximately 4,000 km of fiber-optic lines and other related assets.
The network, which is currently active, encompasses the "Golden Triangle" of Monterrey, Guadalajara and Mexico City as well as other key areas of Mexico, and will allow GTC to provide cost-effective telecom and information services to key metropolitan centers in the rapidly expanding U.S./Mexico telecommunications corridor. TelSpan is currently in the process of finalizing its financing for the acquisition of the network. The closing of GTC's acquisition of TelSpan is conditioned on the successful financing and completion of its acquisition of the network and related assets.
In a related agreement, GTC agreed to sell a controlling interest of its Perfexa Solutions' Business Process Outsourcing (BPO) call center and IT development subsidiary to the shareholders of Infospan, a California company commonly controlled by some of the shareholders of TelSpan. Infospan, a BPO, call center and IT development company headquartered in Irvine, CA, has call center operations in Mexico, significant sales networks for customer growth opportunities for India, Mexico and the U.S. and a seasoned management team with significant experience in the outsourcing sector.
S. Paul Sandhu, GTC's chief executive stated, "The acquisition of TelSpan will allow us to leverage GTC's established U.S. telecommunications operations with TelSpan's access to the 4th largest fiber network in Mexico. This, coupled with our ongoing strategy to expand into the local services market, will allow us to create a full service, facilities-based, telecommunications company able to better compete in today's rapidly changing marketplace."
Farooq Bajwa, TelSpan's chief executive stated, "We are very excited with the synergy created by combining TelSpan's Mexico facilities with GTC's established U.S. telecommunications operations. The coupling of GTC's U.S. operations and TelSpan's Mexican network will allow the combined companies to aggressively exploit the largest international telecom corridor between any two countries in the world."
Pursuant to the terms of the acquisition agreements, upon completion of the proposed transactions, TelSpan shareholders will secure a 84% majority control position within GTC and Infospan's shareholders will secure a 84% majority control position within Perfexa. The closing of the transactions are conditioned upon approval of GTC's shareholders which is anticipated to occur within the next ninety days.