Erol's biggest creditor is Ascend Communications Inc. (www.ascend.com),
provider of servers and modems that comprise 72 percent of Erol's network
hardware costs. In its filing, Erol's said it is working to reduce unspecified
payables to Ascend by $4 million, borrowing $500,000 at 10 percent, and
receiving unspecified infusions from vice chairman and majority shareholder
Erol Onaran to cover working capital through October 1998. Onaran has also
personally guaranteed Erol's lease with Ascend as well as leases with General
Electric Capital Computer Leasing Corp. and MicroTech Leasing Corp. and
the bank loan. Onaran, for those unfamiliar, built a Washington, D.C.-area
home-electronics empire from a single store, then started a video rental
business he sold to Blockbuster Entertainment Inc. in 1991 for $30 million.
Erol's Internet, started in 1995, is a third act.
The above certainly is consistent with the remark by Ejabat, in Scottsdale, that some ISPs are tapped-out, cash-wise.
Gary Korn |
