Winstar Seeks Accelerated Exit From Chapter 11
NEW YORK--(BUSINESS WIRE)--Aug. 1, 2001--
Company to Focus on Core On-Network Business;
Retains The Blackstone Group as M&A Advisor
Winstar Communications, Inc. today announced two actions designed to speed its exit from Chapter 11.
First, the company will now focus its new sales efforts on small and medium customers in its 17 major branches, its 200 premier national accounts and the government business that the company has won in 11 markets.
In connection with this effort, Winstar is reducing the size of its workforce by approximately 950 employees through layoffs and sales of non-core units. The company said its new staffing levels will have no impact on customer service. Winstar's 30,000 business customers will continue to be supported by a strong, responsive and focused sales and service organization as well as technical, engineering, provisioning, and systems support to meet their needs.
Second, in response to contacts from many interested parties, Winstar has retained The Blackstone Group as an M&A advisor to assist with the potential sale of or investment in the company. Such a sale or investment would enable Winstar to emerge from the Chapter 11 process more quickly.
"Winstar is focused on emerging from Chapter 11 as quickly as possible while maximizing the value of our company for our stakeholders," said William J. Rouhana, Jr., Winstar chairman and chief executive officer. "By obtaining $175 million of financing from a consortium of banks led by Citibank and Bank of New York, cutting our costs and growing our core on-net business, we are in a position to be cash flow positive this year. In addition, working with Blackstone gives us an opportunity to explore the sale of or an investment in the company, providing us with flexibility to exit Chapter 11 alone or with a partner."
Statements in this release contain forward-looking information about management expectations, strategic objectives, business prospects, anticipated financial or operational performance, and other similar matters. These statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties. A variety of factors, many of which are beyond Winstar's control, could cause actual results and experience to differ materially from the expectations expressed in these statements. These factors include, but are not limited to, volatility in the financial and capital markets and the impact on access to and the terms of additional capital, actions and initiatives by current and potential competitors, events or circumstances impacting major customers, suppliers or financing sources, the effect of current and future legislation or regulation, the ability of the company to design and construct its broadband network and to sell and provision services, and additional factors described in the reports filed by Winstar with the Securities and Exchange Commission (SEC), including Winstar's Annual Report on Form 10-K for the year ended December 31, 1999, which is available on the SEC's Web site, at www.sec.gov. Winstar undertakes no responsibility to update or revise any statements in this release, whether as a result of new information, future events or otherwise.
Winstar and Office.com are registered trademarks of Winstar Communications, Inc.
CONTACT:
Winstar Communications, Inc.
Daniel Briggs, 212/792-9032
dbriggs@winstar.com |
