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COPYRIGHT 2001 PR Newswire Association LLC
KANSAS CITY, MO., March 30 /PRNewswire/ --
Birch Telecom, Inc. today announced that its majority stockholder, an affiliate of private investment firm Kohlberg Kravis Roberts & Co. (KKR), has agreed to purchase up to $105 million of a new issue of convertible preferred stock. Funding under the agreement will occur in two closings. Funds of $75 million were received today while up to an additional $30 million in equity will be received on July 31, 2001, subject to customary closing conditions. Concurrent with this transaction, certain terms and covenants under Birch's senior credit facility were amended.
"Clearly, the issue of financing is the one that looms largest for firms in our industry," said David E. Scott, president and CEO of Birch. "Since the financial markets began to deteriorate a year ago, Birch has been successful in raising an additional $155 million in equity (including this round) and $70 million in debt. We have scaled back our expansion plans and now expect to be fully funded with this new financing. Our ability to raise this capital is based on our continued successful implementation of a business model that brings our local operations to profitability over a very short period of time."
Fourth Quarter 2000 Results
Birch reported revenue of $36.1 million for the quarter ended December 31, 2000 compared to $32.4 million for the third quarter 2000 and $18.9 million for the fourth quarter 1999. For the fourth quarter, earnings before interest, taxes, depreciation and amortization (EBITDA) was a $32.7 million loss, up from a $30.8 million loss for the third quarter of this year and up from a fourth quarter 1999 loss of $14.9...
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