Tough day for our friend Michelle Gagne @ 360…
—— Forwarded Message From: “360networks”
June 28, 2001
For immediate release
360NETWORKS FILES FOR REORGANIZATION IN CANADA AND THE U.S.
All figures in U.S. dollars
Vancouver Â 360networks today announced that the company and several of its operating subsidiaries have filed for protection under the CompaniesÂ¹ Creditors Arrangement Act (CCAA) in the Supreme Court of British Columbia. The companyÂ¹s principal U.S. subsidiary, 360networks (USA) inc. and 22 of its affiliates concurrently filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Where necessary, appropriate action is being taken in other jurisdictions to protect the companyÂ¹s assets.
The company and the subsidiaries covered by the filings currently have approximately $155 million of unrestricted cash, cash equivalents, short-term investments and marketable securities on hand. 360networks expects to use these funds to maintain service to existing customers in Canada and the United States, and to complete key segments of its North American network.
360networks believes it will be able to complete its North American network using its cash and current backlog of contracted revenues. Further growth will depend on its ability to attract additional financing or strategic investment into the reorganized company. Subject to certain conditions, the companyÂ¹s senior secured lenders have agreed to subordinate their liens to up to $100 million of debtor-in-possessions (DIP) financing, and the company has received a firm proposal for such financing. 360networks also intends to consider additional proposals to enable it to obtain the best available terms and is examining other strategic alternatives, including asset sales.
Â³We are taking these steps to restructure our business and financial position in a difficult telecommunications environment,Â² said Greg Maffei, president and chief executive officer of 360networks. Â³While very disappointing, we believe todayÂ¹s filings provide us the best opportunity to reorganize and operate our core business.Â²
Lazard Freres is assisting 360networks to develop and evaluate options, including restructuring its debt obligations. PricewaterhouseCoopers Inc. has been appointed by the court in Canada as Monitor of the Canadian proceeding.
The filings do not include the companyÂ¹s 360americas subsidiaries, which were acquired in connection with the purchase of GlobeNet Communications Group Limited.
In addition, 360networks intends to initiate insolvency proceedings for certain of its European subsidiaries.
The company also announced the resignation of seven board members: Kevin Compton, Glenn Creamer, John Malone, Claude Mongeau, Christian Reinaudo, John Stanton and Jim Voelker. These resignations took place prior to todayÂ¹s filings.
About 360networks 360networks (NASDAQ: TSIX and TSE: TSX) offers optical network services to telecommunications and data-centric organizations. The companyÂ¹s fiber optic network connects more than 50 major cities in North America, Europe and South America with terrestrial segments and undersea cables. As of March 31, 2001, 360networks had total assets of $6.3 billion and total liabilities of $3.6 billion. Currently, the company has $1.2 billion of senior secured bank debt and $1.45 billion, represented by unsecured Senior Notes. The companyÂ¹s cash revenue was $644 million in 2000 and $274 million in the first quarter of 2001.
For more information contact:
Investor Relations Nancy Bacchieri ir [at] 360 [dot] net
Media Michelle GagnÃ© michelle.gagne [at] 360 [dot] net
This news release contains information about managementÂ¹s view of 360networksÂ¹ future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, the doubt as to 360networksÂ¹ ability as a going concern, risks associated with efforts to restructure the obligations of 360networks, risks associated with efforts to obtain DIP financing, risks associated with proceedings commenced by 360networks and its subsidiaries under the U.S. Bankruptcy Code or CanadaÂ¹s CompaniesÂ¹ Creditors Arrangement Act, competitive developments, risks associated with 360networksÂ¹ growth, regulatory risks, and other factors. 360networks assumes no obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting such forward-looking statements.
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—— End of Forwarded Message