Primus Telecommunications Further Reduces Debt By Over $40 Million

📅 February 11, 2002 - Primus Telecommunications Group, Incorporated, a facilities-based total service provider, has announced aseries of transactions which the company says has reduced its debt byapproximately $44 million.

"A year ago we announced that one of our key objectives was to reduce debt,"stated K. Paul Singh, chairman and CEO of Primus. "With the transactionsannounced today, we have reduced our debt over the past year fromapproximately $1.3 billion to approximately $635 million and we intend tofocus on further reductions."
Primus made open market purchases of $32.5 million principal amount of highyield debt securities for which it paid approximately $4.4 million in cash.In particular, the following high yield debt securities were purchased:$21.5 million principal amount of the 11.25% senior notes due 2009, and $11million principal amount of 12.75% senior notes due 2009. This purchaseddebt had annual interest payments of $3.8 million, and represents $27.9million in future interest savings (assuming the bonds were held tomaturity). With these purchases, Primus has reduced the outstanding amountof high yield bonds to $390 million.
While, for accounting purposes, the high yield debt securities purchased bythe company are reported to be "extinguished," all such debt securities havenot been cancelled and are held as treasury bonds by the company. With thesepurchases, the company currently owns more than 50% of the principal amountof each of the four issues of its high yield debt securities.
Agreements were reached with three holders with an aggregate of $11.4million in principal amount of 5.75% Convertible Debentures to exchange attheir request such Debentures for 1,971,667 newly issued shares of Primuscommon stock in exchange transactions exempt from applicable registrationrequirements. As a result of these transactions, Primus will saveapproximately $0.7 million in annual interest payments and $3.4 million infuture interest payments. With these exchanges, Primus has reduced theoutstanding amount of Debentures to $71 million.
The company and/or its subsidiaries will evaluate on a continuing basis themost efficient use of the company's capital, including investment in thecompany's network, systems, and lines of business, and, depending uponmarket conditions and liquidity needs, purchasing, refinancing or otherwiseretiring certain of the company's outstanding debt securities in the openmarket or by other means permitted by its existing covenant restrictions, aswell as restructuring or modifying its debt through issuance of newsecurities, exchanges of debt for equity and other alternatives.