VelaTel Global Communications, a San Diego-based provider of wireless telecommunications networks in China and Peru, said Dec. 9 that it entered into an agreement that could expand its business to Croatia and Montenegro.
VelaTel said it agreed to acquire 75 percent of Herlong Investments Ltd. and its operating subsidiaries, which provide broadband wireless services in those nations, for an undisclosed amount.
In exchange for the 75 percent equity stake, VelaTel said it will contribute all capital expenditures to deploy the networks in Croatia and Montenegro until the companies are cash flow positive. VelaTel said the commitment includes financing through its strategic partner, ZTE Corp., a Chinese company.
VelaTel said it already placed an equipment order and paid a $713,000 down payment for the equipment, which ZTE has made.
Based on an estimated delivery in February, VelaTel said it expects to complete the deployment of the equipment in the summer.
VelaTel shares were trading at a dime on the Pink Sheets exchange Dec. 12 and have ranged from 5 cents to 42 cents in the past 52 weeks.
— Mike Allen