Here's a Nov. 7, 1990, news release from PRNewswire:
FNN and Infotech CEOs Outline Plans for Sale/Restructuring of Companies
NEW YORK, Nov. 7 /PRNewswire/ -- Alan J. Hirschfield and Allan R. Tessler, co-chief executives of Financial News Network Inc. (NASDAQ-NMS: FNNIE) and Infotechnology, Inc. (NASDAQ-NMS: ITCHE), which owns 47 percent of FNN, today announced that based on preliminary reviews of the financial and operating status of the companies, they will recommend offering for sale the companies' principal operations.
In order to effect the most valuable and timely transactions for both the creditors and the shareholders of FNN and Infotech, the investment banking firm of Wertheim Schroder & Co., Inc. has been retained. Wertheim Schroder is internationally known for its expertise in media property mergers, acquisitions and divestitures.
Hirschfield and Tessler stated: "Wertheim has confirmed for us that FNN remains a very valuable franchise, and is one of the top 10 leading cable programming networks in the country. To date, indications of interest in buying FNN have been received from many of the major national and international media companies. Even during this difficult period, FNN continues to increase its subscriber base and gross revenues. More than 80 percent of its subscribers are under long-term contracts at increasing subscriber rates."
"We also believe that FNN's market data companies are quite valuable franchises, and many inquiries have been received regarding their sale. The companies' investment bankers expect to have available, in the near future, offering memoranda for prospective purchasers of FNN and the other businesses. They hope to receive acceptable offers and to conclude negotiations of the contracts for such sales by year end," Hirschfield and Tessler added. The CEOs noted that at this preliminary stage in the sales process there can be no assurance that any such sales will be completed.
"We believe the prices that FNN and Infotech businesses are anticipated to command could satisfy the companies' financial obligations," they continued.
FNN currently has outstanding approximately $49.5 million principal amount of bank loans and approximately $88 million of equipment lease obligations. Infotech currently has outstanding approximately $20.7 million principal amount of bank loans.
"Discussions with our banks are ongoing," stated Hirschfield and Tessler. "We hope to obtain a 90-day moratorium on interest and principal payments and on any defaults. Furthermore, we have met with representatives of substantially all of the lessors of equipment to the companies and are currently in negotiations with them to obtain a 90-day moratorium on all leasing payments. Although there can be no assurance that we will obtain these moratoriums, we remain optimistic about both of these negotiations."
The chief executives also noted that serious interest has been expressed by several parties in the purchase of Infotech's 97 percent owned United Press International, and/or some of its lines of business.
Hirschfield and Tessler added: "As a result of recent contract cancellations and other ongoing factors, UPI currently has a substantial negative monthly cash flow. It has been necessary to make some painful decisions regarding layoffs and reduced compensation to continuing employees, in order for UPI to remain in business until suitable purchasers are identified."
FNN and Infotech previously announced that operating cash flows at the companies were insufficient to meet operating expenses or to cover maturing obligations with respect to the bank loans of the two companies and FNN's lease obligations. Hirschfield and Tessler said: "Following the streamlining measures currently being implemented at the companies, we believe cash flows will fall more closely in line with costs. However, the companies may require additional cash availability during the contemplated sales process."
Hirschfield and Tessler commented: "Overall, we are satisfied by the progress we have made since the boards of directors appointed us on October 24, at preserving the values of the FNN and Infotech businesses. No one is ever pleased with the hard realities of streamlining a business, but when such steps are necessary to ensure the very viability of the companies, they must be done," the CEOs continued. "Our primary objective is to maintain the substantial franchise value of FNN. To do this requires making the necessary overhead reductions that enable the great majority of our employees to remain on the job," they added.
Hirschfield and Tessler added: "We are distressed by many of the unfounded rumors surrounding current events at the companies. First and foremost, any and all allegations concerning fraud or misappropriation of funds at the companies have been, and are being, taken extremely seriously by the boards of directors and have been, or are being, thoroughly investigated by the companies' outside auditors. In addition, the companies are cooperating with the Securities and Exchange Commission's inquiries that we have previously disclosed. To date, inquiries by a special committee of the board of FNN, assisted by auditors and legal counsel, have found only one incident in which company funds were improperly paid and not properly identified on the books of the company. That incident, previously disclosed by FNN, involved the receipt by FNN's former chief financial officer of compensation payments, which were not properly authorized, in the approximate amount of $795,000."
FNN and Infotech collectively own 51 percent of The Learning Channel. In addition to its interest in FNN and UPI, Infotech owns 51 percent of Shark Information Services Corporation, the other 49 percent of which is owned by FNN, and has investments in a number of other media, communications and biotechnology companies.
Infotechnology, Inc. is an integrated communications and information company positioned to meet the needs of businesses and consumers with fast, easy-to-use information products of economic value to its customers.
Financial News Network provides three services to more than 35 million homes on 3,500 cable systems throughout the United States and Canada. The television programming services are FNN:BUSINESS (business news and personal financial management) and FNN:SPORTS (sports information and news), and its market data service is FNN:Data Broadcasting (stock quotes and market information to personal computers). FNN also operates a business radio network.
/CONTACT: Amber Gordon of Quest Business Agency, 703-359-6404 or 212-891-7577, for Financial News Network Inc. and Infotechnology, Inc./
CO: Financial News Network Inc.; Infotechnology, Inc. ST: New York IN: PUB SU: RCN