Redknee announces rights offering and layoff of 500

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By Ted Liu

Redknee Solutions Inc. (TSX: RKN) has entered into a Standby Purchase Agreement with Wave Systems Corp., an affiliate of ESW Capital, LLC, and ESW in connection with the launching of an approximately US $54 million rights offering, fully backstopped by Wave.

TD Securities Inc. acted as financial advisor and Goodmans LLP as legal advisor to Redknee Special Committee in connection with the Rights offering and the Standby Purchase Agreement.

Redknee plans to reduce headcount worldwide by approximately 500 employees. Redknee expects that the majority of the net proceeds from the Rights Offering will be used to fund associated employee severance payments. The balance of the net proceeds will be used for location rationalization, entity simplification and associated fees. It is expected that all of the net proceeds from the Rights Offering will be used by the Company within the 12 months following the Rights Offering.

As part of the Restructuring, David Charron, CFO, will be departing from Redknee. Charron will remain in his role as CFO until the Rights Offering is closed. Anin Basu, current VP of Fiancning, will assume the role of CFO on an interim basis.

Redknee has appointed Mo Jamal to Chief Revenue Officer and Jozsef Czapovics to Vice President, Engineering.

Vishal Kothari, Chief Operating Officer, and Chris McGrady, Vice President Human Resources, Integration Management and Corporate IT and Security, will be departing the company in the next 12 months. Redknee’s current senior management team led by Danielle Royston, CEO, will assume responsibility for Redknee’s operating and human resource initiatives following the departures of Kothari and McGrady.

photo credit: Redknee Solutions