Metromedia Fiber Network Takes Stake in Undersea Fiber-Optic Cables....
......To Interconnect Its Worldwide IP Infrastructure
MFN Assumes Pacific Gateway Exchange's Ownership Position in Two Consortia with Fiber-Optic Cables Across the Pacific and Atlantic Oceans
NEW YORK--(BUSINESS WIRE)--May 9, 2000-- Metromedia Fiber Network, Inc. (MFN) (Nasdaq: MFNX - news), the leader in deployment of optical Internet infrastructure within key metropolitan areas internationally, has finalized an agreement with Pacific Gateway Exchange, Inc. (Nasdaq: PGEX - news) to purchase PGE's ownership position in two transoceanic fiber-optic cable consortia.
The acquisition includes capacity on the US-Europe cable (TAT-14) and the Japan-U.S. Cable Network, along with the acquisition of two of Pacific Gateway's related Japanese subsidiaries.
This purchase establishes MFN as one of the largest owners in the two consortia, and will complement the company's plans to build and control an end-to-end, worldwide optical network. The addition of the Japanese subsidiaries will increase MFN's presence in the Asia-Pacific region. AboveNet Communications, a wholly owned subsidiary of MFN, already offers its global, one-hop Internet network in Japan through a strategic joint venture with major technology leaders.
``This is a major milestone in our ongoing strategy to create a seamless, global optical Internet infrastructure that reaches the major markets throughout the world,'' said Nick Tanzi, president and chief operating officer of Metromedia Fiber Network. ``By enhancing the capacity and reach of our international network, we continue to expand our presence in our target markets and deliver unprecedented service to our growing customer base.''
Under the terms of the sale, MFN will pay to Pacific Gateway approximately $52 million in net cash proceeds, primarily to reimburse it for payments to the consortia to date. MFN will assume Pacific Gateway's future payment obligations to the cable consortia.
``This acquisition allows us to significantly increase our worldwide bandwidth and connectivity capabilities to continue delivering the best global Internet experience available,'' said Dave Rand, chief technology officer, Metromedia Fiber Network. ``As a key player in these two cable consortia, we are achieving our goal of creating an MFN-controlled, purely optical, end-to-end IP network to meet our customers' growing global needs.''
The companies expect that the Japan-U.S. transaction will close by the end of May 2000 and that the TAT-14 transaction will close within 90 days. The TAT-14 agreement is subject to the approval of the management committee of the TAT-14 Cable Network.
About Pacific Gateway Exchange, Inc.
Pacific Gateway is a global facilities-based communications carrier providing voice, bandwidth, data and Internet services to a wide array of domestic and international carriers, ISPs, and retail customers. Pacific Gateway, through its wholly owned subsidiary, IECom, provides voice, data access, and travel services to the ethnic small office/home office and residential markets in the US. Onyx Networks, also a wholly owned subsidiary of Pacific Gateway, provides Internet access and high bandwidth services to the global market.
The Company and its offshore subsidiaries are a party to 45 operating agreements that provide landing rights in 28 countries. Pacific Gateway also has ownership interests in 32 digital undersea fiber optic cable systems that provide for the exchange of telecommunications traffic with foreign carriers. In addition, Pacific Gateway's domestic network spans 12 major metropolitan cities. The Company presently operates switching and international gateway facilities in New York, Los Angeles, Dallas, the United Kingdom, Russia, New Zealand, Japan, Australia, and Germany.
About Metromedia Fiber Network
Metromedia Fiber Network, Inc., the leading provider of end-to-end optical network solutions, is revolutionizing the fiber-optic industry. By offering virtually unlimited, unmetered bandwidth at a fixed cost, Metromedia Fiber Network is eliminating the bandwidth barrier and redefining the way broadband capacity is sold. Metromedia Fiber Network is extending metropolitan fiber-optic infrastructure to the end user in strategic top-tier markets, enabling its customers to implement the latest data, video, Internet and multimedia applications. In addition to its current expansion in 51 cities in North America, Metromedia Fiber Network is establishing an international presence with planned fiber-optic network builds in 16 cities throughout Europe.
Together with its subsidiaries, AboveNet Communications, Inc., a leading provider of co-location and Internet connectivity solutions, and Paix.net, Inc., the leading neutral Internet Exchange, Metromedia Fiber Network is unleashing the full potential of the Internet. The combined company facilitates the explosive growth of e-commerce and advanced Internet applications by delivering secure, reliable and scalable optical networks and IP services to Internet content and service providers, carriers and enterprise users worldwide. For more information about Metromedia Fiber Network, please visit the company's Web site at www.mmfn.com.
This news release contains certain forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such risks and uncertainties include, but are not limited to, general economic and business conditions, competition, changes in technology and methods of marketing, and various other factors beyond the Company's control. This also includes such factors as described from time to time in the SEC reports filed by Metromedia Fiber Network, including the Company's most recently filed Form S-3 and its annual report on Form 10-K for the year ended December 31, 1999. |
