360networks files for reorganization in Canada and the U.S.
All figures in U.S. dollars
VANCOUVER, Jun 28, 2001 /PRNewswire via COMTEX/ -- 360networks today announced that the company and several of its operating subsidiaries have filed for protection under the Companies' Creditors Arrangement Act (CCAA) in the Supreme Court of British Columbia. The company's 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 company's 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 company's 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.
"We are taking these steps to restructure our business and financial position in a difficult telecommunications environment," said Greg Maffei, president and chief executive officer of 360networks. "While very disappointing, we believe today's filings provide us the best opportunity to reorganize and operate our core business."
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 company's 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 today's filings. |
