Algo Group declares completion of common shares

24 Aug '05

3 min read

Leading apparel company Algo Group Inc announced that it has completed its previously announced private placement of an aggregate of 52,000,000 of its common shares at a price of $0.05 per share. A company controlled by Dan Elituv, Chairman of Algo, purchased 22,000,000 of such shares, Max Azria Finance Inc, a company controlled by Max Azria, a former Director of Algo, purchased 22,000,000 of such shares, and a company controlled by Marc Kakon, President and CEO of Algo, purchased 8,000,000 of such shares.

Following completion of the private placement, Elituv, Azria and Kakon respectively, directly or indirectly, beneficially own approximately 31.3 percent, 34.0 percent and 5.2 percent of the issued and outstanding common shares of Algo.

The purpose of the acquisition of the shares of Algo by Max Azria Finance Inc and by the companies controlled by Elituv and Kakon, respectively, was to increase their holdings in Algo and for general investment purposes.

While there is no current intention to acquire additional shares of Algo, Max Azria Finance Inc and the companies controlled by Elituv and Kakon, may, directly or indirectly, effect trades in securities in the future, depending on market prices and other circumstances and considerations.

In consideration for the shares it issued in the private placement, Algo received approximately $1.5 million gross cash proceeds and approximately approximately $1.0 million reduced the debt owed by Algo to a company controlled by Elituv. The cash proceeds will be used by Algo to repay amounts owed to its primary lenders, GMAC Commercial Finance Corporation-Canada and GMAC Commercial LLC, further to its existing credit facilities with GMAC.

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