Jan, 2003 : Primus to raise $42 million through new stock

📅 January 2, 2003 - PRIMUS Telecommunications Group Inc. (primustel.com) agreed to raise $42 million through the sale of convertible preferred stock. The company reached the agreement with two private equity funds and an institutional investor linked to American International Group Inc. PRIMUS plans to use the proceeds for debt reduction, working capital and possibly acquisitions.

The sale, once completed, would shore up the firm's finances in the short term. It could also benefit the preferred stockholders. Under terms of the sale, the shares would convert to PRIMUS common stock at $1.876 a share.
"The investment announced today marks a significant milestone in PRIMUS' execution of the three-pronged strategy we announced two years ago," stated 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 per cent 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 is a global facilities-based service provider offering bundled voice, data, Internet, digital subscriber line (DSL), Web hosting, enhanced application, virtual private network (VPN), and other value-added services.