Too complex, I don't like it:"ABLE TELCOM HOLDING CORP. RELEASES ADDITIONAL INFORMATION CONCER
2/23/99 10:15
ing
Senior Subordinated Notes and Series B Preferred Stock Transaction
WEST PALM BEACH, Fla., Feb. 23 /PRNewswire/ -- Able Telcom Holding Corp.
(Nasdaq: ABTE) previously reported on February 17, 1999 that the Senior
Subordinated Notes and a majority of the outstanding shares of Series B
Preferred Stock were purchased by a third party (the "Purchaser") from their
original holders. The original holders of the Series B Preferred Stock
retained approximately 22% of the currently outstanding Series B Preferred
Stock. The original holders retained ownership of all outstanding warrants.
The price of the warrants associated with the Series B preferred stock were
reduced from $19.80 per share to an average of approximately $13.40 per share.
No reduction was made to the warrants associated with the Senior Subordinated
Notes.
The funds used to purchase the Senior Subordinated Notes and Series B
Preferred Stock were advanced to Able by one of its largest customers. The
company loaned these funds to the Purchaser in order to facilitate the
purchase of the securities from their original holders. The advance of funds
by the customer and the loan by Able to the Purchaser are due on the earlier
of October 31, 2000, or upon such date as the Purchaser receives funds, either
in the redemption of the Series B Preferred Stock, payment of the Senior
Subordinated Notes, or sale of such securities. The loan to the Purchaser is
secured by the securities acquired. In addition the customer providing the
advance has agreed to make an additional $15 million available for working
capital needs in the form of additional advances against their contract.
In connection with the transfer of the Senior Subordinated Notes and the
Series B Preferred Stock, the Purchaser and the remaining holders of the
Series B Preferred Stock agreed to either waive all outstanding defaults under
such securities or refrain from exercising any remedies with respect to any
outstanding defaults for a period of 90 days from February 17, 1999. During
this period, Able has agreed to use its best efforts to have declared
effective a registration statement covering the shares of common stock
underlying the Series B Preferred Stock and the Warrants.
The Purchaser has also agreed (i) not to exercise any default remedy until
March 1, 2000, (ii) to extend the maturity date of the Senior Subordinated
Notes until March 1, 2000 and (iii) to establish a floor conversion price of
$8.25 per share applicable in all circumstances for all shares of Series B
Preferred Stock held by the Purchaser. In exchange for these additional
agreements, Able has agreed to reduce the conversion price of any warrants
subsequently purchased by the Purchaser from the current holders of the
warrants associated with the Series B Preferred Stock to a price per share
equal to not more than 85% of the closing price of Able's common stock on the
date prior to such purchase or, if less, to a price per share equal to such
closing price minus $3.00.
The effect of these transactions has been to substantially reduce the
potential for dilution from the original conversion terms of the Series B
Preferred Stock, extend the current maturity date on the Senior Subordinated
Notes, provide additional liquidity and allow additional time for the
Purchaser to complete funding. Able intends to continue to seek additional
investment and financing to allow for sufficient working capital to fulfill
its billion dollar backlog and growth needs. However no assurance can be given
that such financing and/or investment will be available on terms acceptable to
Able, or at all.
Forward-Looking Statements
This document contains forward-looking statements, that are based on
current expectations, estimates, forecasts and projections about the Company's
business, management's beliefs and assumptions made by management. In
addition, other written or oral statements which constitute forward-looking
statements may be made by or on behalf of the Company. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not guarantees
of future performance and involve certain risks, uncertainties and
assumptions, ("Future Factors") which are difficult to predict.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements. The Company
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
Future Factors include increasing price and product/services competition
by foreign and domestic competitors, including new entrants; rapid
technological developments and changes and the Company's ability to continue
to introduce competitive new products/services on a timely, cost-effective
basis; the mix of products/services; the achievement of lower costs and
expenses; the outcome and impact of Year 2000 issues; resolution of liquidity
and accounting issues by the Company, restructuring debt and other obligations
of the Company, domestic and foreign governmental and public policy changes
which may affect the level of new investments and purchases made by customers;
changes in environmental and other domestic and foreign governmental
regulations; protection and validity of patent and other intellectual property
rights; reliance on large customers' technological, implementation and
cost/financial risks in the increasing use of large, multi-year contracts; the
cyclical nature of the Company's business; the outcome of pending and future
litigation and governmental proceedings and continued financial instruments
and financial resources in the amounts, successful restructuring of agreements
between the Company and third parties, at the times and on the terms required
to support the Company's future business. These are representative of the
Future Factors that could affect the outcome of the forward-looking
statements. In addition, such statements would be affected by general industry
and market conditions and growth rates, general domestic and international
economic conditions including interest rate and currency exchange rate
fluctuations and other Future Factors.
For a further description of Future factors that could cause actual
results to differ materially from such forward-looking statements, see the
additional Future Factors and Cautionary Statements contained in the Company's
public filings, both quarterly and annual.
Able is a leading international telecommunications systems integrator,
project developer and facilities manager of innovative, large scale,
facilities-based fiber optic and other communications networks. The Company's
customers include emerging telecom service providers, entrepreneurial Internet
Service Providers, and many of the world's largest telecommunications
companies. Able's wholly owned subsidiary MFS Network Technologies, Inc.
(MFSNT) is leveraging its fast-growth telecom heritage in the market place.
MFSNT is an outgrowth of Peter Kiewit Son's, Inc. one of the most respected
names in the construction industry. It was acquired by Able from MCI/WorldCom,
Inc., one of the world's most innovative telecommunications companies, which
remains one of Able's significant customers.
SOURCE Able Telcom Holding Corp.
-0- 02/23/99
/CONTACT: Eskew and Associates for Able Telcom Holding Corp.,
561-681-4858/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 003850/
(ABTE)" |
