Otelco Takes Next Steps to Implement Restructuring
25 Mars 2013 - 11:00AM
Business Wire
Otelco Inc. (NASDAQ: OTT)(TSX: OTT.un), a wireline
telecommunication services provider in Alabama, Maine,
Massachusetts, Missouri, New Hampshire, Vermont and West
Virginia, announced today that on March 24, 2013, the Company filed
voluntary petitions for reorganization under chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware. Otelco filed for chapter 11 in order to implement its
“pre-packaged” financial restructuring plan – a plan that already
has been accepted by 100% of the Company’s senior lenders, as well
as holders of over 96% in dollar amount of Otelco’s senior
subordinated notes who cast ballots. Otelco’s restructuring plan
will strengthen the Company by deleveraging its balance sheet and
reducing its overall indebtedness by approximately $135
million.
Otelco will maintain normal day-to-day business operations and
continue to provide its customers with quality services throughout
the restructuring. The Company’s plan provides for suppliers and
vendors to be paid in full during and after the restructuring
process and for employees to continue to receive their usual pay
and benefits.
Because of the overwhelming support Otelco’s plan has received
from both its secured and unsecured creditors (including holders of
the Company’s IDS units), Otelco anticipates that the Company will
be able to complete its financial restructuring at the end of the
second quarter of 2013.
“Our proposed plan represents the best possible outcome for the
Company and our IDS unit holders, and I am gratified that our
stakeholders have expressed their support in overwhelming numbers,”
stated Michael Weaver, CEO of Otelco. “Our focus will now be on
quickly implementing the restructuring with no impact on our
day-to-day operations.” Implementation of the restructuring plan
and other relief is subject to court approval, regulatory approvals
and other customary closing conditions.
The Company’s restructuring counsel is Willkie Farr &
Gallagher LLP and its financial advisor is Evercore Partners. The
restructuring counsel for the administrative agent for the senior
lenders is King & Spalding LLP and its financial advisor is FTI
Consulting.
FORWARD LOOKING STATEMENTS
Statements in this press release that are not statements of
historical or current fact constitute forward-looking statements.
Such forward-looking statements involve known and unknown risks,
uncertainties, and other unknown factors that could impact the
Company’s restructuring plans or cause the actual results of the
Company to be materially different from the historical results or
from any future results expressed or implied by such
forward-looking statements. In addition to statements which
explicitly describe such risks and uncertainties, readers are urged
to consider statements labeled with the terms “believes,” “belief,”
“expects,” “intends,” “anticipates,” “plans,” or similar terms to
be uncertain and forward-looking. There can be no assurance that
the restructuring transaction described herein will be consummated.
The forward-looking statements contained herein are also subject
generally to other risks and uncertainties that are described from
time to time in the Company’s filings with the Securities and
Exchange Commission.
ABOUT OTELCO
Otelco Inc. provides wireline telecommunications services in
Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and
West Virginia. The Company’s services include local and long
distance telephone, network access, transport, digital high-speed
data lines and dial-up internet access, cable television and other
telephone related services. With approximately 98,000 voice and
data access lines, which are collectively referred to as access
line equivalents, Otelco is among the top 25 largest local exchange
carriers in the United States based on number of access lines.
Otelco operates ten incumbent telephone companies serving rural
markets, or rural local exchange carriers. It also provides
competitive retail and wholesale communications services through
several subsidiaries. For more information, visit the Company’s
website at www.OtelcoInc.com.
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