360networks Corp., a provider of broadband telecommunications in North America, has agreed to sell its Canadian ass...
May 26, 2004
360networks Corp., a provider of broadband telecommunications in North America, has agreed to sell its Canadian assets, primarily Group Telecom, to Bell Canada for US$205 million in cash.
Bell will also purchase selected northern US interconnection assets and related liabilities.
“This is a great transaction for 360networks,” said Greg Maffei, chairman and CEO of 360networks. “Group Telecom has been growing profitability and faster than the market.
"We remained optimistic about our ability to continue to grow given our people, strong regional assets and focus on data and medium-sized enterprises. We are very disappointed to be exiting Canada, however the opportunity to monetize our tax losses and eliminate our debt was
360networks will use the cash proceeds to pay down debt. Combined with cash on hand, the proceeds will eliminate the company’s debt.
“In our view, the transaction represents a very good outcome for the senior creditors, particularly in light of the challenges in the telecom industry, and evidences management’s hard work to maximize value for 360’s
creditors and other stakeholders.” said Susan Atkins, Managing Director, JP Morgan Chase.
“We intend to recommend this transaction to the senior creditors of 360networks.”
Following the closing of the GT deal, 360networks will focus on its U.S. operations, which include a low-cost, long-haul network footprint and a Western US regional network.
The deal, anticipated to close by September 2004, is subject to approval.