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News >> Technology >>
Primus sells $42 M preferred stock
By siliconindia
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Monday, 13 January 2003, 20:30 IST
MCLEAN: Primus Telecommunications Group Inc. (NasdaqSC:PRTL - News) said on Tuesday it will sell $42 million in newly-issued convertible preferred stock in a private offering to two equity funds sponsored by American International Group Inc. (NYSE:AIG - News) and an additional institutional investor that is a limited partner of one of the funds.
The Series C preferred shares will be convertible into shares of the company's common stock at a price of $1.876 per share, which represents a 25.5 percent stake in Primus.
The company said it has received the first $33 million from the buyers, representing a 20 percent stake.
"The investment announced today marks a significant milestone in Primus' execution of the three-pronged strategy we announced two years ago," said K. Paul Singh, chairman and chief executive officer of Primus.
"In late 2000, as we surveyed a bleak economic landscape and uncertain future for the telecommunications sector, we resolved to become an industry survivor through implementing a bold strategy to dramatically reduce our debt, aggressively grow our EBITDA (earnings before interest, taxes, depreciation and amortization) and, when substantial progress was made on both those fronts, to access additional capital. Since that time, we have reduced our debt by over 50% and we have grown our EBITDA from slightly positive to a projected level approaching $100 million for 2002. With today's announcement, we can record substantial progress on the third prong of our strategy."
Primus intends to use the proceeds for general corporate purposes, including working capital, debt reduction and potential acquisitions. The company has the right to issue up to $75 million of additional convertible preferred stock through June 1, 2004.