CHARLOTTE -- RCG Companies Incorporated (AMEX:RCG), a diversified travel and leisure company, has entered into definitive subscription agreements for approximately $31 million from institutional investors for a private placement of RCG convertible preferred stock and associated warrants. The placement is expected to close by the close of business on April 15, 2005.
Proceeds of the placement net of expenses will be used to complete the previously announced acquisition of 100% of the outstanding stock of OneTravel, Inc. (www.onetravel.com), redeem the outstanding convertible debentures issued in February, 2005, repay an interim debt financing consummated in January, 2005, and for general working capital purposes.
RCG Companies Incorporated also announced that it is closing the acquisition of OneTravel and expects to complete this acquisition by the close of business on April 15, 2005. Although the purchase agreement for OneTravel provided for a closing on April 14, 2005, the parties mutually agreed to extend closing to accommodate the logistics involved with closing RCG Companies Incorporated's financing transaction. OneTravel is a privately held provider of online and offline discount travel products and services offering its customers the ability to search for and book a full range of travel products. OneTravel also has proprietary dynamic packaging search engine technology, a significant attribute for an online travel site, which is geared toward allowing its customers to achieve cost savings when customizing vacation packages in real time by selecting and combining air, hotel and rental car options. OneTravel owns and operates numerous online direct-to-consumer travel businesses through a variety of Web sites including OneTravel.com, 11thHour.com, CheapSeats.com and DiscountHotels.com. OneTravel also provides technology solutions and support services that enable other businesses to operate in the online travel arena and has developed turnkey solutions for organizations such as The Travel Channel, Sam's Club and SideStep.
William Goldstein, Chairman of RCG noted: "Upon formal closing, which is expected later today, this series of transactions completes RCG's transformation into a full service online and offline travel company. OneTravel's performance since February, when we signed the purchase agreement, has exceeded our expectations so we could not be more pleased with this acquisition becoming a reality. OneTravel's performance is also a testament to the quality of the management personnel RCG will be acquiring with OneTravel and we will shortly announce the key roles these individuals will play in RCG going forward. With respect to the financing, we are very pleased that we were able to attract $31 million of investment capital interest in our company. The fact that we were able to get the support of high quality institutional funds desiring to acquire common stock in our company should bode well for all stockholders in the long run. We feel our travel strategy is sound and are very confident of our ability to execute the integration plan. We now feel we can be very competitive with the largest players in our space including Expedia and Orbitz."
About RCG Companies Incorporated
RCG Companies Incorporated (www.rcgcompanies.com) derives a majority of its revenues from its travel business subsidiaries, FS SunTours, Inc., which sells leisure and vacation travel packages under the SunTrips(R) brand (www.suntrips.com), and Farequest Holdings, Inc., which is a leading online and offline provider of a full range of travel services operating under the name 1-800-CHEAPSEATS (www.1800cheapseats.com). RCG's other wholly owned subsidiary, Logisoft Corp. (www.logisoft.com), operates in the software and information technology services sector.
