unit, the Bermuda-based company said yesterday.

The sale, to Savage president and CEO Mr. Ron Coburn for $33 million, was financed by Fleet Equity Partners, First Union National Bank of North Carolina and the Bank of Scotland.

"The completion of the sale of Savage represents the final step in a process initiated over a year ago to change the direction of Challenger,'' said company president and CEO Mr. Peter Leighton.

"In the last 12 months, Challenger has acquired Intelect, Inc. and Intelect Europe Ltd., sold Savage for a gain of approximately $16 million, increased cash reserves to $19 million and obtained a listing on the NASDAQ NMS system.

Challenger will also be seeking shareholder approval to change its name to Intelect Communications Systems Ltd. reflecting the nature of Challenger's ongoing business activities and helping to build name recognition in the field of telecommunications,'' he said.

Challenger's delisting from the Toronto Stock Exchange should be effective November 9, Mr. Leighton added.

The sale of the Savage unit, which includes rifle makers Savage Arms and Lakefield Arms as well as a shooting range system company, doubles Challenger's net worth to about $30 million or $2.67 per share.

The sale provides funds to retire the debt incurred to acquire, and to fund the expansion of, Intelect companies.

Working capital after the retirement of Intelect acquisition debts and transaction costs, will amount to about $23 million, of which cash reserves will be about $19 million, Challenger said.

The company has 11,385,117 common shares outstanding and long term debt of less than $1.5 million.