The relationship between Saratoga and Ultramar is expected to have an initial term of five years, with an option to extend it for a further three years. Saratoga expects [image-nocss] these new Ultramar sites to generate a total of approximately 1 million transactions per year.
Saratoga also announces that it has decided to discontinue its money remittance business. In October 2006, Saratoga entered into a memorandum of agreement with Union Bank of the Philippines in order to develop, commercialize and distribute a money remittance platform which would enable persons residing in Canada to electronically transfer funds to persons residing in the Philippines; however, management has recently reviewed this line of business and determined there to be limited prospects of generating sufficient operating revenue in order to offset the costs associated with completing the launch of this platform. As a result, management has determined it to be in the best interests of Saratoga and its shareholders that its money remittance operations be terminated.
Management expects to incur expenses of no greater than $10,000 in connection with the closure of this division, and to realize savings of approximately $100,000 in its 2010 financial year as a result of such closure. The discontinuance of the money remittance operations is not expected to have any other material impact on the financial statements of Saratoga.
Saratoga, Montreal, has two principal lines of business: automatic teller machines and prepaid products. Through its ATM division, Saratoga ATM Corp. Inc., Saratoga places and operates a network of ATMs in eastern Canada. Through is prepaid products division, Car-Tel Distributions Inc., Saratoga distributes to consumers point-of-sale (POS)-activated prepaid cellular telephone PINs and long-distance calling cards and offers to retailers a variety of electronic gift card solutions.
Montreal-based Ultramar, a subsidiary of Valero Energy Corp., San Antonio, Texas, owns and operates a refinery with current production capacity is 265,000 barrels of oil per day, at L a a' a' a' a a''vis (Saint-Romuald), near Quebec City. It markets gasoline and diesel fuel via a network of more than 860 retail sales outlets and 89 cardlocks, in addition to selling home heating oil to some 140,000 customers.
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