[March 30, 2005] ITC^DeltaCom Announces Restructuring of $260 Million of Existing Secured Debt and Receipt of $20 Million in New Secured Financing Tweet WEST POINT, Ga., March 30 /PRNewswire-FirstCall/ -- ITC^DeltaCom, Inc. , a leading provider of integrated communications services to customers in the southeastern United States, today announced that it has completed a restructuring of its existing $260 million of secured indebtedness to enhance its liquidity through the deferral of scheduled amortization and obtained a new $20 million subordinated secured term loan from its majority stockholder, Welsh, Carson, Anderson & Stowe (WCAS). The Company has drawn down the full amount of the new loan and will use the net loan proceeds for general corporate purposes. Under the terms of the Company's secured indebtedness following the restructuring: - total principal payments of $41 million previously due before June 30, 2006, the maturity date of the Company's senior credit facility, have been deferred until June 30, 2006; - all $22 million of obligations under the Company's capital leases have been replaced with loans in the same amount under the senior credit facility; - the first scheduled principal payment under the Company's $55.7 million junior credit facility has been deferred from September 30, 2006 to September 30, 2007, and the maturity date of this facility has been extended by one year from June 30, 2008 to June 30, 2009; - the new $20 million subordinated secured loan will mature after the senior and junior credit facilities are repaid in full and bear payment-in-kind (PIK) interest of 12% per annum; - up to $30 million of asset sale proceeds may be retained by the Company for general corporate purposes rather than required to prepay credit facility borrowings; - interest rates payable on the outstanding senior and junior credit facilities will generally be increased by 2.5% annually; and - financial covenants in both senior and junior credit facilities have been adjusted to provide the Company with significantly more operational flexibility. "This restructuring provides the liquidity and flexibility needed to successfully operate our business while we explore additional opportunities to deliver on our growth strategy," said Randall E. Curran, ITC^DeltaCom chief executive officer. In connection with the new $20 million subordinated secured loan, the Company also issued WCAS 10-year warrants to purchase 20 million shares of the Company's common stock, which will be exercisable following the Company's distribution of an information statement to its stockholders under SEC rules. The warrant exercise price of $0.60 per share is equal to the volume-weighted average trading price of the Company's common stock as quoted on the Nasdaq National Market for the 10 consecutive trading days before the restructuring closing. Thomas E. McInerney, the Company's chairman and a general partner of WCAS, said, "This additional investment in ITC^DeltaCom reflects our confidence in the company's new management team and ITC^DeltaCom's growth prospects." Miller Buckfire Ying & Co. LLC acted as the Company's financial advisor in connection with the restructuring. Additional information about these transactions will be set forth in the Company's annual report on Form 10-K, which will be filed with the Securities and Exchange Commission on March 31, 2005. ABOUT ITC^DELTACOM, INC. ITC^DeltaCom, headquartered in West Point, Ga., provides, through its operating subsidiaries, integrated telecommunications and technology services to businesses and consumers in the southeastern United States. ITC^DeltaCom has a fiber optic network spanning approximately 14,500 route miles, including more than 10,900 route miles of owned fiber, and offers a comprehensive suite of voice and data communications services, including local, long distance, enhanced data, Internet, colocation and managed services, and sells customer premise equipment to end-user customers. The Company operates approximately 29 voice switches and 74 data switches, and is one of the largest competitive telecommunications providers in its primary eight-state region. ITC^DeltaCom has interconnection agreements with BellSouth, Verizon, SBC, CenturyTel and Sprint for resale and access to unbundled network elements and is a certified competitive local exchange carrier (CLEC) in Arkansas, Texas, Virginia and all nine BellSouth states. For more information about ITC^DeltaCom, visit the Company's Web site at http://www.itcdeltacom.com/ . FORWARD-LOOKING STATEMENTS Except for the historical and present factual information contained herein, this release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this release, the words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions as they relate to ITC^DeltaCom, Inc. or its management are intended to identify these forward-looking statements. All statements by the Company regarding its expected financial position, revenues, liquidity, cash flow and other operating results, business strategy, financing plans, forecasted trends related to the markets in which it operates, legal proceedings and similar matters are forward-looking statements. The Company's actual results could be materially different from its expectations because of various risks. These risks, some of which are discussed under the caption "Business-Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2003, and in subsequent reports, include the Company's dependence on new product development, rapid technological and market change, the Company's dependence upon rights of way and other third-party agreements, debt service and other cash requirements, liquidity constraints and risks related to future growth and rapid expansion. Other important risk factors that could cause actual events or results to differ from those contained or implied in the forward-looking statements include, without limitation, costs, delays and other difficulties related to the proposed transactions, inability to integrate acquired companies successfully, customer reductions in services, delays or difficulties in deployment and implementation of colocation arrangements and facilities, appeals of or failures by third parties to comply with rulings of governmental entities, inability to meet installation schedules, general economic and business conditions, failure to maintain underlying service/vendor arrangements, competition, adverse changes in the regulatory or legislative environment, and various other factors beyond the Company's control. ITC^DeltaCom disclaims any responsibility to update these forward-looking statements. Investor Contact: Media Contact: Richard E. Fish Lee A. Kimball Chief Administrative Officer Vice President, Marketing 256-382-3827 919-863-7149 [email protected] [email protected] ITC^DeltaCom, Inc CONTACT: Investors, Richard E. Fish, Chief Administrative Officer,+1-256-382-3827, or [email protected] ; or Media, Lee A. Kimball,Vice President, Marketing, +1-919-863-7149, or [email protected] Web site: http://www.itcdeltacom.com/ [ Back To TMCnet.com's Homepage ]