UPDATE 1-Phonetime sets up restructuring committee
* Co to delist from TSX, apply for venture exchange listing
* Says not sufficiently capitalized for the growth
* Enters into forbearance agreement with debenture holders
April 21 (Reuters) - Telecommunications network carrier Phonetime Inc PHD.TO said its board set up a restructuring committee and will begin talks with parties regarding the sale or partnership of its retail division.
"The company is not sufficiently capitalized for the growth it experienced over the last three years; this has put pressure on the liquidity and internal processes at the company," interim Chief Executive Gary Clifford said in a statement. Phonetime said it is voluntarily delisting from the Toronto Stock Exchange to reduce listing costs and will be applying for a listing on the Toronto Venture Exchange.
The company, which has been in violation of its bank covenants under its senior loan facility since the fourth quarter of 2008, said it has entered into a forbearance agreement with certain debenture holders.
Phonetime provides long-distance services to major telephone carriers globally and also sells phone cards through retail outlets across Canada.
The company said it expects to file its restated financial statements for 2007, 2008 and 2009 by May 15.
Shares of Phonetime were flat at 8 Canadian cents Wednesday morning. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Anne Pallivathuckal)
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