360networks Corp., a provider of wholesale and data telecommunications services and a company that recently emerged...
November 19, 2002
360networks Corp., a provider of wholesale and data telecommunications services and a company that recently emerged from creditor protection, announced yesterday it will acquire Group Telecom, a facilities- based telecommunications provider.
Terms of the cash acquisition were not disclosed, but will be included in Group Telecom’s plan of reorganization.
“This agreement will achieve the best possible result for our customers, employees, and creditors," said Greg Maffei, 360networks’ CEO. The transaction will allow our customers to continue to receive leading high-quality, reliable telecommunications services.
The combination will allow the highest number of our employees to remain with a growing company,” said Dan Milliard, Group Telecom chief executive officer. “And this agreement will produce the best possible recovery for our creditors.”
360networks recently completed lighting its advanced intercity fiber networks in North America connecting 48 major cities in the United States and Canada. Group Telecom offers a suite of voice and data telecommunications services across 17 metro fiber networks in nine Canadian provinces.
Outstanding claims of Group Telecom’s unsecured creditors will be dealt with in a CCAA Plan of Arrangement associated with the implementation of the transaction. The two companies reached agreement following a court-authorized, seven-day exclusive negotiating period under the Companies’ Creditors Arrangement Act (CCAA).
Group Telecom first obtained CCAA Court protection on June 26 in order to restructure its business operations and capital structure. Since June, Group Telecom has been granted additional extensions of its CCAA protection, most recently until December 11. The transaction is subject to court approval and regulatory approval.
It is anticipated that the transaction will close on or before February 15, 2003. WL Ross & Co. supported 360networks in the transaction by providing a “backstop” for the cash required to complete the acquisition.