UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
March 26, 2013
Date of Report (date of Earliest Event Reported)
VELATEL GLOBAL COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
| NEVADA | 000-52095 | 98-0489800 | ||
|
(State or Other Jurisdiction of Incorporation or Organization) |
(Commission File No.) |
(I.R.S. Employer Identification No.) |
5950 La Place Court, Suite 160, Carlsbad, CA 92008
(Address of principal executive offices and zip code)
(760) 230-8986
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| £ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| £ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| £ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| £ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01 Other Events
On March 26, 2013, VelaTel Global Communications, Inc., a Nevada corporation and the registrant responsible for the filing of this Form 8-K (“Company”) issued a press release announcing its intention to sell the equity interest in or assets held through its Peru subsidiary, VelaTel Peru, S.A. The press release will be available through the Company’s website, www.velatel.com.
Item 9.01 Exhibits
| 99.1 | Press release |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934 as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VelaTel Global Communications, Inc. | ||
| Date: March 26, 2013 | By: | /s/ George Alvarez |
| Name: George Alvarez Title: Chief Executive Officer | ||
2
EXHIBIT 99.1
VELATEL TO SELL EQUITY OR ASSETS OF ITS PERU SUBSIDIARY
Disposition of VelaTel Peru will Enable VelaTel to Focus on its
More Lucrative Asia and Europe Operations
SAN DIEGO, March 25, 2013 (GLOBE NEWSWIRE) – VelaTel Global Communications (OTCQB:VELA), a leader in deploying and operating wireless broadband and telecommunication networks worldwide, announced today that it has engaged a business broker to explore the options to sell its Peru subsidiary, VelaTel Peru, S.A., either as an equity sale or a sale of its component assets.
VelaTel acquired VelaTel Peru (then known as Perusat, S.A.) in 2009. VelaTel Peru historically offered fixed telephony services including interconnections, national and international long distance, and voice over internet protocol (VoIP) solutions. Also in 2009, VelaTel Peru was awarded radio frequency licenses to use 2.5 GHz spectrum to offer wireless broadband access services in eight of Peru’s largest cities (excluding the capital city of Lima and its suburbs). In 2010, VelaTel launched a network in the Peru market under the brand name GO MOVIL.
Throughout its ownership of VelaTel Peru, VelaTel has explored numerous options to obtain spectrum in Lima. VelaTel has now determined that the scarcity and cost of Lima spectrum, the time required to recoup its existing infrastructure investment, the growing need to upgrade to LTE to remain competitive, and the cash required to sustain operations in Peru until VelaTel Peru becomes cash flow positive, all combine to dictate that a near term sale of the subsidiary is the best course of action for VelaTel and its shareholders.
VelaTel’s CEO George Alvarez explained the reasons for the decision: “The rate of subscriber growth in Peru does not project to keep pace with our other divisions in Asia and Europe. We need to invest our resources where we will achieve the greatest rate of return. Although the competitive landscape in Peru has changed since we acquired VelaTel Peru in 2009, we have added value and the assets have appreciated. We plan to sell the assets in order to pay down debt without dilution to shareholders that would ultimately result from continuing to fund negative cash flow in Peru.”
About VelaTel Global Communications, Inc.
VelaTel acquires spectrum assets through acquisition or joint venture relationships, and provides capital, engineering, architectural and construction services related to the build-out of wireless broadband telecommunications networks, which it then operates by offering services attractive to residential, enterprise and government subscribers. VelaTel currently focuses on emerging markets where internet penetration rate is low relative to the capacity of incumbent operators to provide comparable cutting edge services, and/or where the entry cost to acquire spectrum is low relative to projected subscribers. VelaTel currently has project operations in Hong Kong, People’s Republic of China, Croatia, Montenegro and Peru. Additional target markets include countries in Latin America, the Caribbean, Southeast Asia and Eastern Europe. VelaTel’s administrative headquarters are in Carlsbad, California. For more information, please visit www.velatel.com.
Safe Harbor
This press release may contain forward-looking statements involving known and unknown risks, uncertainties and other factors that could cause VelaTel's actual operating results to be materially different from any historical results or from any future results expressed or implied by such forward-looking statements. Readers are urged to consider statements that contain terms such as "may," "will," "should," "believe," "expect," “project,” "intend," "anticipate," "plan," or "estimate" to be forward-looking. VelaTel does not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise. You should independently investigate and fully understand all risks before making an investment decision.
Contacts:
VelaTel Global Communications, Inc.
Tim Matula
Investor Relations
(Toll Free) 1-877-260-9170
investors@velatel.com