Geonex Corp. said Wednesday it has given up ownership of a Canadian subsidiary to satisfy the demands of its primary lender. The move freed up the company's bank accounts, allowing employees to cash their paychecks.
The St. Petersburg-based mapmaker said it handed ownership of Toronto-based Geonex Aerodat Inc. to its lender, Morgens, Waterfall, Vintiadis & Co. of New York. In return, Morgens, Waterfall canceled $7.3-million in Geonex debt and released its freeze on Geonex bank accounts.
Geonex still owes $25.1-million to Morgens, Waterfall and $1-million to others.
"The Aerodat group was a separate operating group and not part of our core business," Geonex spokeswoman Karen Mortham said. Aerodat is a mineral exploration mapping company with about $10-million in annual revenues. Mortham said the subsidiary contributed "about $1-million or less" to the parent Geonex Corp.'s profits and employs about 50 people.
The deal leaves Geonex with about $200,000 worth of assets in excess of liabilities. Before the transaction, the company had a negative net worth.
Mortham said Geonex has obtained commitments for $2.25-million in new financing and hopes to find an additional $1-million in the next 60 days to complete its restructuring plan.
Geonex employs about 975 people worldwide, including about 400 in St. Petersburg. It provides computerized mapping services to U.S. and foreign government agencies and to utilities. The company lost $727,000 on $31-million in revenues during the first nine months of the most recent fiscal year.