Look Communications has expansion plans after getting $5 million in investment

Struggling wireless cable and high-speed Internet provider Look Communications Inc. has received a cash infusion of $5 million that it will use to expand its customer base and better serve existing customers. Concord ON-based Unique Broadband Systems Inc. (UBS) has chipped in the money through a private placement worth about $1.392 million that will see it acquire a nine per cent share of Look. It will also invest about $3.608 million in consideration for a debenture with a five-year term that could be converted after a year into more shares of Look that would bring UBS’ ownership to 23 per cent. The two companies also signed a $2.4-million equipment supply agreement that will see UBS provide Look with high-speed Internet equipment. It offers "last mile" connectivity that will allow Look to "expand and target its network coverage to a wider and specific service area" in its licensed area of Ontario and Quebec. The transaction has been approved by the boards of directors of both companies, and is expected to close in early September following the completion of due diligence by Unique and receipt of approval by the TSX Venture Exchange. While much of the capital infusion will be directed toward Look’s Internet offering, its wireless cable television service will not be ignored, according to Alex Radmanovich of Pelican Communications, which has been hired to speak on Look’s behalf. "Mostly its Internet, but in a way it’s both (video and Internet services). The focus is clearly on the Internet side, but that doesn’t mean that once they get some of the stuff in that it won’t help on the video side," he says. The cash infusion is a welcome shot in the arm for Look, which emerged from bankruptcy protection earlier this year and has only recently started to once again market its wireless service offerings (CCR, Dec. 6/01). "How many people do you think thought that Look would get money so soon after coming out of CCAA (Companies’ Creditors Arrangement Act)? Obviously, it’s very helpful and beneficial, and the timing couldn’t be better," says Radmanovich. "Look for the longest time didn’t have the money to do anything. They’re just gradually starting to do some advertising." He would not comment on the projected number of subscribers the cash infusion could bring in. Peter Block, an investor and media relations spokesperson for UBS, tells Canadian Communications Reports that the equipment vendor has invested in the wireless company because the two companies "together can better address this under-served market than on their own. "If the two companies together can better address this market then presumably that means more equipment sales as well," he says. "…Presumably if all goes well and working together they’re able to better address this market, then clearly there will be a need for greater production." Look chair Michael Cytrynbaum noted in a media release, "The cash infusion will provide Look with additional financial capacity, while the relationship with UBS will offer us leading technology. This strategic partnership will support the execution of our business strategy to offer secure, highly reliable and competitive high-speed Internet access to small and medium-sized enterprises (SME) in our coverage areas."

Look Communications has expansion plans after getting $5 million in investment

News | 08/15/2002 4:00 am EDT

To keep reading, get a free trial.

Already a Subscriber?

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us