DGSE Announced the Closing of a Transaction with Receiver in the Matter of Stanford Financial Group Including the Elimination...
May 26 2010 - 9:30AM
Business Wire
DGSE Companies, Inc. (NYSE Amex: DGSE), DGSE announced today the
closing of a series of actions and transactions related to the
formerly announced Agreement with the Receiver in the matter of
Stanford Financial Group. On May 12, the Court in this matter
issued an order which permitted the Receiver and DGSE to complete
the transactions which included the cancellation of all agreements
between DGSE and Stanford International Bank (“SIB”), and the
elimination of all loan obligations fees and other related charges
in connection with approximately $10.5 million in loans between
Superior Galleries, a wholly-owned subsidiary of DGSE, and SIB.
In connection with the above, DGSE and its Chairman also
announced entering into a series of agreements with NTR Metals, LLC
(“NTR”). NTR Metals® is a $1.2 Billion (revenue) company that
refines over 30 million pounds of metal annually. It is one of the
world’s largest precious metals companies, making a market in all
precious metal bullion and offering a full range of refining,
recycling and minting services. NTR Metals operates over 30
locations throughout the United States and in the United Kingdom.
It serves more than 20,000 companies, ranging from small,
independent businesses to large corporations (NTR is not open to
the public). Additional information about NTR is available at
ntrmetals.com
To facilitate the closing with SIB, DGSE has assigned its right
to acquire 3,000,000 shares of DGSE common stock for a direct
payment from NTR to the Receivership in the amount of $3.6 million
dollars, representing 100 percent of the required payment to the
Receiver. Simultaneously, NTR granted our Chairman a 4-year proxy
on all shares acquired by NTR. NTR will not be represented on the
Board of Directors of DGSE or otherwise be involved in the
management of DGSE. In addition, NTR has agreed to a one-year
lock-up on all of the shares acquired. When NTR granted its proxy,
our Chairman granted to NTR an option to acquire 1,000,000 of his
personally-owned shares at an exercise price of $6.00 per share for
two years, and if unexercised on the 2nd anniversary of the grant
date, then for an additional two years at $10.00 per share. Should
NTR exercise its option in either period, NTR’s proxy will
terminate, and our Chairman will immediately grant NTR his proxy on
all of his then-owned shares.
NTR’s President, John Loftus, commented, “We are quite pleased
to have taken this step with our longtime friends at DGSE. This
transaction will help DGSE put a challenging chapter behind them,
relieve debt, and improve their balance sheet. NTR looks forward to
assisting DGSE as it focuses on strong earnings growth during the
coming years.”
In connection with the above agreements, DGSE also caused
376,361 shares of DGSE common stock to certain key employees and
Directors not including our Chairman.
William Oyster, President of DGSE, said, “We are very excited to
have concluded all of these matters in a way that enhances the
future for DGSE and its stockholders. Having NTR as a major
interest holder will provide us with new tools to grow and
revitalize our business. For over a year, we have had to operate
under the uncertainty of the SIB matter and its detrimental effect
on our flexibility. While it has certainly restrained our ability
to grow, it has also given us the opportunity to focus on
controlling our expenses and reviewing our infrastructure. We
expect our new relationship with NTR to materially enhance our
ability to service our customers, with resulting benefits in top-
and bottom-line growth. We have already begun to experience the
benefits of the new activities. From the end of the first quarter,
we have enjoyed more dynamic top-line activity, with revenues
exceeding 2009 results on a year-over-year basis (year to date) for
the first time since early 2009. All of our activities are growing
again, with material improvements in all segments.“
This press release includes statements which may constitute
"forward-looking" statements, usually containing the words
"believe," "estimate," 'project," "expect" or similar expressions.
These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or
contribute to such differences include, but are not limited to,
continued acceptance of the Company's products and services in the
marketplace, competitive factors, dependence upon third-party
vendors, and other risks detailed in the Company's periodic report
filings with the Securities and Exchange Commission. By making
these forward-looking statements, the Company undertakes no
obligation to update these statements for revisions or changes
after the date of this release.
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