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Offshore Systems' Naval Navigation Business to Benefit from Proceeds of Private Placement
Vancouver, Canada - February 18, 2003 -- Offshore Systems International Ltd. (OSI) (TSX:OSI; OTCBB:OFSYF), an international supplier of specialized navigation technology to naval customers, today announced it has completed a private placement of US$2,000,000 (CDN$3,100,000) with four New York based institutional funds. The proceeds of the financing will be used for sales and marketing purposes and general working capital.
"We are going to use the proceeds to spur the marketing of our navigational software and systems to NATO and allied naval fleets," said John Jacobson, President and CEO of OSI. "Many U.S. Navy and Canadian Navy ships deploying to the Middle East already have OSI's software on the bridge. We see many more opportunities with the rest of NATO and their allies. This private placement gives us the capital to push even harder into the market. Our balance sheet is now strong enough to handle growth as the market expands and to consider acquisitions to fill any gaps that develop in our product line or our distribution channels as the market evolves."
Much of OSI's success in producing recent record fiscal revenue and earnings is due to the Company's lead product, ECPINS®, which is recognized as the world's leading electronic chart system for warship navigation. The Canadian and Danish navies have adopted OSI's software and systems fleet-wide, and the United States Navy has deployed it as a situational awareness tool with several aircraft carrier battle groups. The Company is pursuing emerging opportunities with several other NATO-member navies and will be in a position to increase these sales and marketing efforts with the additional capital from the private placement.
The private placement consists of 61,244 units at CDN$50.00 per unit. Each unit consists of one Class B Series 1 preference share (a "Preference Share"), and 22.75 common share purchase warrants. The Preference Shares have a cumulative dividend of 6% per annum, payable semi-annually. Each Preference Share carries one vote at all OSI shareholder meetings. Each Preference Share is convertible at the option of the holder into 45.5 common shares of OSI at a deemed conversion price of CDN$1.10 each. OSI may also force conversion if, at any time after 13 months following closing, the closing trading price of its common shares is greater than CDN$2.20 for at least twenty consecutive trading days. OSI also has the right to redeem the Preference Shares after five years. The Preference Shares will have priority over all other shares on a liquidation or dissolution of OSI.
Each share purchase warrant issued as part of the units entitle the holder to acquire one common share of OSI for CDN$1.10 for a period of 5 years following closing. During the first year following closing, all warrants will be exercisable for cash only. Thereafter, the warrants will be exercisable for cash or, at the option of the purchaser, by way of "cashless exercise". OSI will have the right to redeem the warrants for CDN$0.10 each upon not less than twenty days notice, provided that its common shares close above CDN$3.30 for a period of twenty consecutive trading days.
OSI will pay an investment banking fee of 8% of the gross proceeds plus reasonable expenses. The private placement is subject to regulatory approval and applicable securities laws.
About Offshore Systems International Limited
Offshore Systems International Ltd. (OSI) provides precise electronic display systems and geo-spatial data for situational awareness. Founded in 1977, OSI maintains a position of technological leadership in its field, a record appreciated by military, government, and commercial customers around the world. OSI conducts its operations through two business units: Offshore Systems Ltd. provides systems for the dynamic display of geo-spatial data for mission-critical operations such as fleet navigation; and OSI Geomatics which provides analysis, production, and distribution of geo-spatial data for electronic display. OSI is listed on the Toronto Stock Exchange (TSX:OSI) and in the United States of America on the Over the Counter Bulletin Board (OTCBB:OFSYF).
Forward-Looking Statements
This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws including Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended, with respect to achieving corporate objectives, developing additional project interests, OSI's analysis of opportunities in the acquisition and development of various project interests and other matters. These statements are made under the 'safe harbour' provisions of the Private Securities Litigation Reform Act of 1995 and, as such, involve known and unknown risks and uncertainties and other factors that may cause the actual results to be materially different from the results implied herein. Although Offshore Systems International believes the expectations reflected in such forward-look statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ from expectations include the effects of general economic conditions, changing foreign exchange rates, actions by government authorities, uncertainties associated with contract negotiations, industry supply.
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Jane Hayward
Investor Relations |
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