Nuri Telecom and Apivio Systems reach agreement to support acquisition

VANCOUVER, BC —(Marketwired – April 16, 2017) – Nuri Telecom Company Limited (“Nuri“), together with its wholly–owned subsidiary 1101324 B.C. Ltd. (the “Offeror“), and Apivio Systems Inc. (TSX VENTURE: APV) (“Apivio“) are pleased to announce that they have reached an agreement to support the amended offer by Nuri to purchase all of the Apivio common shares (the “Shares“).

Under the terms of the agreement (the “Agreement“) Nuri has agreed to amend its offer (the “Amended Offer“) to provide for an increase in the offer price to Apivio shareholders to $0.45 for each Share. The Amended Offer, valuing Apivio at approximately $24.0 million, has unanimous support of the Boards of Directors of both companies.

“We are pleased to have the support of the Apivio Board of Directors,” said Song Man Cho, Nuri's Chairman and Chief Executive Officer. “We believe this transaction delivers excellent value to Apivio shareholders. Together, we're bringing this full, fair and final offer to Apivio shareholders and we encourage everyone to tender their shares.”

“Since Nuri made its initial offer, our Board has remained steadfast in our commitment to maximize value for all shareholders,” said Rob Bakshi, Apivio's President and Chief Executive Officer. “This agreement fulfills that commitment, providing our shareholders with a fair price for their shares, we can now unreservedly recommend shareholders tender their shares to Nuri's improved offer.”

A notice of variation for the Amended Offer is expected to be mailed to registered security holders of Apivio by April 21, 2017 and will be filed on Apivio's SEDAR profile. Apivio shareholders are urged to carefully review this document in its entirety.

The Amended Offer is subject to certain conditions, including the acquisition by Nuri of at least 51% of the outstanding Shares (calculated on a fully–diluted basis) being validly tendered under the Amended Offer and not withdrawn. This minimum tender condition has been lowered previously from 66⅔%.

The Apivio Board will issue a notice of change to its directors' circular that will contain its favourable recommendation to Apivio shareholders. Apivio expects to issue and mail the notice of change with Nuri's notice of variation in connection with the Amended Offer.

The Agreement contains, among other things, provisions for non–solicitation of competing offers, provided that Apivio has the right to consider superior proposals from other parties.

PI Financial Corp. are financial advisors to Nuri. Norton Rose Fulbright Canada LLP are Nuri's legal advisors. Haywood Securities Inc. is Apivio's financial advisor. Apivio's legal advisors are Blake, Cassels & Graydon LLP.

About Nuri

Nuri is a provider of next generation communication technology for the Internet of Things (“IoT“) and the Smart Grid industry. Nuri is a global leader in providing end–to–end advanced metering infrastructure solutions that save consumers money and help utilities to run a network infrastructure that's proven, reliable, future–proof and fully standardized. Nuri's core product offering is a communication solution for smart meters, AiMiR, which provides automatic meter readings of electricity, water, gas and other measurements and delivers gathered data through a variety of networks in real time. AiMiR helps consumers and utility companies manage their resource consumption by providing real time information, accommodating their resource distribution to optimum levels for both short term and long term infrastructure needs.

To date, Nuri has deployed its communication systems to over two million households and businesses in 19 countries worldwide, and that number continues to grow each day through large–scale deployments in commercial, industrial, and residential markets. With a growing list of global customers, Nuri is expanding its customer base throughout Asia, Europe and Africa. Recently, Nuri has won US$79.0 million Soria projects in Norway and US$12.0 million ECG projects in Ghana.

About Apivio

Apivio Systems Inc. is a Canadian technology company principally engaged in the design, development, marketing, and sale of communications equipment and software. It has a wholly–owned Korean subsidiary with an established track record of supplying VoIP telephone equipment and other products to major Korean and international telecommunications carriers. For more information regarding the Company, please refer to its respective public filings available at www.sedar.com.

About Nuri's Offer to Apivio shareholders

Full details of the Amended Offer and the related documents including, once filed, the notice of variation, are, or will be, available under the Apivio profile at sedar.com. Laurel Hill Advisory Group, who have been retained as Nuri's information agent for instructions at:

1–877–452–7184 (Toll Free in North America)

1–416–304–0211 (Collect Outside North America)

or by email at assistance@laurelhill.com

Forward–Looking Statements

This news release contains certain “forward–looking information” within the meaning of applicable Canadian securities legislation (collectively, “forward–looking statements”), including statements about: the timing of mailing of the notice of change and variation in respect of the Amended Offer, the expected expiry time of the offer, current expectations, estimates, projections and assumptions. Although each of Nuri and Apivio, as applicable, believes that the expectations represented by such forward–looking statements are reasonable, there can be no assurance that such expectations will prove to be correct, so readers are cautioned not to place undue reliance on them. Forward–looking statements are not guarantees of future events occurring or of future performance and involve a number of risks and uncertainties. Users of this information are cautioned that actual events and results may differ materially as a result of, among other things, assumptions regarding the timely receipt of regulatory and other approvals; and risks associated with existing and potential future lawsuits and regulatory actions. Readers are cautioned that the foregoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect events and results are included in reports and other documents, including those related to the Offer, by Nuri and Apivio with Canadian securities regulatory authorities at sedar.com.

Except as required by applicable securities laws, each of Nuri and Apivio disclaims any intention or obligation to publicly update or revise any forward–looking statements, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

IMF Reforms and the Path to Development

By the Editorial Desk, Sri Lanka Sunday Times
Apr 16 2017 (The Sunday Times – Sri Lanka)

A delegation of the International Monetary Fund (IMF) was in Colombo this week ahead of a planned but now postponed visit by its head Christine Lagarde, to discuss Sri Lanka’s worsening economic situation. With the country in dire straits with an acute foreign exchange and debt crisis, the IMF’s reform menu for stabilising the economy, one can be certain, will be the standard road map the institution has for developing countries.

Markets must be allowed to work properly, it will say, meaning increasing interest rates, faster currency depreciation, and permitting loss-making enterprises such as the Electricity Board (CEB) and the National Water Supply and Drainage Board (NWSDB) to raise rates, fast-tracking revenue measures, more cuts in expenditure and for the State to sell its assets like the Hilton and upcoming Hyatt Hotels, Water’s Edge and Lanka Hospitals.

Sri Lanka has always skirted by through dependence on foreign aid and loans (bilateral and the likes of the IMF). IMF programmes have been part and parcel of the Sri Lankan economy for decades, and the current programme was not entirely due to any impending foreign exchange or balance of payment crisis but an attempt to get a seal of good housekeeping on the macro economy and to follow a consistent policy to increase revenue and restructure foreign debt.

One crucial element on the debt side is to convert US Dollars eight (8) billion of Chinese debt into equity starting with the Hambantota PPP (Public-Private Partnership) and for others to follow and for them to start generating revenue. The Colombo International Financial Centre (Port City) is a medium-term project that will take two years for landfilling and five years to build – whoever finances the infrastructure.

Related to this will be how the foreign exchange reserves and the rapidly depreciating exchange rate are managed. The need to attract more FDIs (Foreign Direct Investment) and more market access through Free Trade Agreements; expanding the tax base through a new Inland Revenue Act are imperative. Getting financial corruption under control with the same wheeler-dealers back in the game with the Yahapalana Government’s key players distorting decisions to feed corruption; and converting all the IPS, Harvard, McKinsey and Baker & Mckenzie work into a medium to long-term programme that is predictable and consistent are the fundamentals needed to fix what’s wrong in Sri Lanka. But indeed, that is a tall order.

A Fuel Formula – a formula that may see a price rise if world crude oil prices exceed a certain level; an Electricity Formula – a move that may see a rise in electricity prices – if the IMF’s formula is accepted (it has been pointed out that the CEB’s overdraft is in the region of Rs. 11 billion); and talks on the debt ratio vis-a-vis GDP i.e. the rising foreign debt as a percentage of the country’s income, were on the table.

In the IMF’s jargon, reforms will impose short-term costs but the economy will recover through medium-term gains, meaning lower income groups will face the brunt of this adjustment in the short-term, but benefits will trickle through to them in the medium-term, say beyond 2019 or 2020. By then, this Government will be facing impending elections, (along with the probability of dealing with a severe external debt crisis in 2019, and possible calls for wage increases) and is almost likely to abandon stabilisation measures and propose a ‘populist’ agenda, whatever that means.

The IMF is lending a paltry sum not exceeding $500 million a year totaling $1,500 million over the 2016-2019 period. Sri Lanka’s repayment needs, due to commercial borrowing of the previous Administration, banks and state-owned enterprises, are a minimum of $1,500 million a year annually from 2017 onwards. The IMF facility will only cover part of this repayment and for the balance we are told by the IMF, to borrow at high interest rates through syndicated loans or international bonds.

Resorting to foreign commercial loans or allowing foreign investors to buy in the domestic bond market is, in general, a recipe for future financial crisis. The IMF programme seems badly negotiated by not taking this factor fully into account compared to the previous Rajapaksa regime’s effort in raising $2,600 million from the IMF. That regime, on the other hand, frittered away the $2,600 million in record time leaving the present Sirisena-Wickremesinghe Administration to pick up the pieces.

IMF measures are probably unavoidable once a crisis strikes. However, the pain imposed on the poor and leaving growth mechanisms to the market inevitably lead to retrogression in policy execution. So the IMF support cycle repeats itself once in few years.

Preventing the crisis from occurring is the key. A widening budget deficit, pressure on the balance of payments, an overheating economy all are clearly tell-tale signs of economic mismanagement. The Government’s inability to recognise such signals emanating from a mal-functioning economy early, and to take prompt corrective actions have led it into the IMF’s arms. However, averting the crisis is only one side of the coin. Realising a diversified export base is the other side as our rate of growth is constrained by the size of the deficit in the balance of payments.

The current and or any future Government will have to find ways to overcome the commercial debt hangover inherited from the exploits of the last Government’s financial wizards. Over the next decade every year from 2017, the Government will face a mini or major crisis: it must fund large roll-over repayments, try to maintain stability while achieving realistic growth rates, if it is to avoid further doses of IMF medicine. A tough task to pull off, for any Government.

How has the current Government faced up to these gigantic tasks? We have a Finance Ministry and a Central Bank at odds touting the theory of twin deficits and flexible exchange rate as mantra. The Prime Minister, who has put forward elaborate plans over the last two years, wants new institutions, complementary laws or committees to solve emerging issues. We have a President fond of setting up reconciliation committees for each minor problem ranging from lottery ticket margins, licence payments on vehicles and recognition of SAITM degrees — and an economic vision rooted in the 1970s.

The scorecard is not encouraging. In this dark scenario, the Joint Opposition is gleefully awaiting its turn in 2020 or earlier to impose its authoritarian ‘home-grown’ economic and political philosophies on the suffering population.

A bleak future awaits Sri Lanka unless the Government rolls up its sleeves and comes up with a coherent strategy and implements it expeditiously. IMF support, if required, will be peripheral to this exercise.

This story was originally published by The Sunday Times, Sri Lanka

Rising Dragon, Wounded Eagle

By Munir Akram
Apr 16 2017 (Dawn, Pakistan)

When China`s former vice premier, Qian Qichen, was asked 20 years ago about the future of Sino-US relations, he reportedly responded: `They [Sino-US relations] will never be as good as [...] Read more »