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Technology Stocks : GST Telecom (GSTX) 4th quarter earning -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (342)	5/22/2000 11:06:00 AM
From: Rob Preuss	Respond to of 369

Silver Lining? Monday May 22, 7:58 am Eastern Time Company Press Release SOURCE: MBN Communications, Inc. Time Warner Telecom Faces Competitive Bid For Certain GST Assets Maui Company Vies for Hawaii Assets HONOLULU, May 22 /PRNewswire/ -- The Hawaii assets of GST Telecommunications, Inc. (Nasdaq: GSTX - news) could come under local ownership and control if plans by a Maui company come through. MBN Communications, Inc., based in Maui, entered an agreement on April 27, 2000, with GST Telecommunications, Inc. to acquire its Hawaii subsidiaries, GST Telecom Hawaii, Inc. and GST Hawaii OnLine (HOL) for $76 million in cash, a price equal to the book value of GST's total Hawaii assets. GST Telecommunications, which filed for protection under Chapter 11 of the U.S. Bankruptcy Code on May 17, 2000, has signed a letter of intent with Time Warner Telecom, Inc. (Nasdaq: TWTC - news) for the sale of substantially all the assets of GST for $450 million, or less than 50 percent of GST's total asset value. GST owes its creditors approximately $1.2 billion. A large percentage of the creditors are represented by Houlihan Lokey Howard & Zukin. If the creditors accept the Time Warner offer and ignore MBN's offer, they would leave as much as $40 million on the table for the Hawaii assets alone. Time Warner Telecom intends to seek an expedited hearing from the U.S. Bankruptcy Court, with a final ruling on June 23, 2000. MBN is attempting to purchase the Hawaii subsidiaries, which include GST Telecom Hawaii, a Competitive Local Exchange Carrier (CLEC); GST Hawaii OnLine, the state's largest Internet service provider; and an undersea fiber- optic network that connects the six major Hawaiian Islands; for fair value, and intends to present its plan directly to GST's largest creditors. MBN Communications Group is a privately held Hawaii corporation with headquarters in Premier Place, located in the Maui Research and Technology Park. For more information, contact Tim Georges, MBN Communications, Inc., at 808-270-3000, ext. 304. SOURCE: MBN Communications, Inc.

To: Susan Saline who wrote (342)	6/21/2000 5:48:00 PM
From: Rob Preuss	Respond to of 369

Unhappy shareholders try to force GST Telecom out of bankruptcy 6.16.2000 Plan will likely meet opposition from potential buyers and creditors by BILL STEWART, VBJ Staff Reporter A growing group of disgruntled GST shareholders has announced plans to file a motion to dismiss the company?s bankruptcy petition. If the shareholders succeed, they say they?ll also try to oust the company?s board of directors and acting chief executive officer Tom Malone. The shareholders then plan to seize control of the company and attempt to reorganize. GST filed for Chapter 11 bankruptcy protection on May 17. At the same time, the company signed a letter of intent to sell nearly all its assets to Time Warner Telecom for $450 million. That offer, which has since been withdrawn, was less than half the book value of those assets. Saddled with approximately $1.2 billion in debt and very little cash on hand, GST had little choice but to seek protection while attempting to reorganize. Shareholders were outraged by the fact that GST agreed to sell its assets in what essentially amounted to a fire sale. There should have been enough interest in the company?s fiber optic network to command a price closer to book value, many of the owners said. Apparently AT&T agreed with that opinion. Earlier this month, the communications giant informed the U.S. Bankruptcy Court of Delaware that it intends to submit a bid for GST?s assets. But AT&T complained that the June 20 deadline for submitting bids leaves too little time to assess the value and condition of those assets. The mere presence of AT&T in the bidding process made some shareholders wonder whether Malone and GST?s board acted too quickly in accepting Time Warner?s offer. The leader of the shareholder revolt declined to comment on the record, but several shareholders who communicate on the Yahoo message board were outraged that GST settled for so little. They?re also upset that GST allegedly turned down an offer to sell the company for $22 per share. The offer, which the Portland Business Journal said was made some time during the last year, would have valued the company at $834 million. Although $834 million looks appealing compared with the amount Time Warner offered, it still would have been less than the value of GST?s network and would have left the company nearly $400 million short of paying off its debt. That, of course, would have left nothing for the shareholders. If the court agrees to dismiss GST?s bankruptcy petition, the shareholders will have to find some way to keep the company running. Two months before announcing its bankruptcy plans, the cash-poor company hired Solomon Smith Barney to search for financing, but those efforts proved fruitless. The petition to dismiss would likely face challenges from any potential buyer and probably even some of GST?s creditors. At least one creditor, NTFC Capitol Corp. (an affiliate of Nortel Networks), has become actively involved in the bankruptcy proceeding. NTFC, which owns $45 million of GST?s debt, complained at a recent hearing that the proposed sale procedures are too restrictive and slanted too much in favor of Time Warner. NTFC also claimed GST had failed to evaluate alternatives, including shopping itself to other buyers, and failed to perform a valuation of its business to determine the fairness of Time Warner?s $450 million offer. After reviewing the proposed bidding procedures, NTFC accused GST of ?paying lip service to the notion of a competitive auction.? If not for AT&T?s impending bid, the idea of an auction might have been moot. But, with plenty of margin between Time Warner?s bid and the value of GST?s assets, AT&T apparently saw an opportunity to cheaply beef up its network. However, AT&T already has a substantial West Coast presence, where GST?s network is located, so ?I?m not sure why AT&T would want it,? said AG Edwards analyst David Heger. ?But if you can get it below the book value, that?s clearly cheaper than building it yourself.? Source: vbjusa.com