DJ Winstar Didn't Make $75M Payment On Sr Debt Securities
17 Apr 08:56
(This article originally was published Tuesday).
NEW YORK (Dow Jones)--Winstar Communications Inc. (WCII) said it is
considering all appropriate actions, including reorganization under Chapter 11,
following its failure to make interest payments of about $75 million on senior
debt securities due April 16.
Under the terms of this debt, Winstar has 30 days from the payment date to
make the required payment in order to cure the default.
Lucent Technologies Inc. (LU) also has declared a default under the terms of
its facility with Winstar, although Winstar said in a press release Monday that
it disputes the default.
Defaults by Winstar under the Lucent agreements and/or senior notes trigger
cross defaults under other material existing obligations and agreements,
including Winstar's bank facility.
Winstar, a competitive local exchange carrier, said on April 4 that would cut
44% of its work force and halt expansion of its network.
The New York Post reported in its Monday edition that according to a source
familiar with the matter, Lucent pulled its $400 million vendor finance
facility it had with Winstar.
Winstar said in a press release Monday evening that it is still providing
services to its customers and is taking steps to continue to do so. The company
has retained Blackstone Group for advice on restructuring its debt.
Winstar said it is considering a reorganization under Chapter 11 of the U.S.
Bankruptcy Code "in order to avoid the significant adverse consequences" that
the defaults could cause.
As a result of these developments, Winstar said it won't file its Form 10-K
on a timely basis.
Winstar previously filed for an extension of its annual report for the year
ended Dec. 31, citing material transactions that haven't yet been completed.
Winstar said on April 2 that it expected to file its form 10-K no later than
April 17
Winstar reported a 2000 loss of $870.2 million, or $11.19 a share, on revenue
of $759.3 million.
At 4 p.m. EDT Monday, Winstar shares traded at 35 cents, up 8 cents or 29.6%,
on Nasdaq volume of 10.3 million shares. Average daily volume is 6.19 million
shares. The shares hit a 52-week high of $45.50 on May 5,
-Ralph Tasgal; Dow Jones Newswires; 201-938-5400
(END) DOW JONES NEWS 04-17-01
08:56 AM |
