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Airgate draws down last $9 million on credit facility
New York, Aug. 15 - AirGate PCS, Inc. said it drew down the last $9.0 million of remaining availability on its credit facility.
The company added that it currently has no additional sources of working capital other than cash on hand and operating cash flow. The drawdown was on Aug. 8, according to a filing with the Securities and Exchange Commission.
The Atlanta, Ga. company noted that much of its network is now complete although it will need to make capital expenditures to increase capacity and improve network operations.
With no external sources of funds, AirGate said that if its revenues are less than expected or operating or capital costs more than expected its financial condition and liquidity may be materially adversely affected.
"In such event, there is substantial risk that the company could not access the credit or capital markets for additional capital," AirGate said in the SEC filing.
It added that it has taken actions to cut operating costs and capital needs and improve operating cash flow including improving the credit quality of new subscribers and its subscriber base by re-imposing and increasing deposits for sub-prime customers, eliminating certain personnel positions, significantly reducing capital expenditures and reducing spending for advertising and promotions.
AirGate is also exploring ways to lower fees and charges from services now provided by Sprint, including a potential outsourcing of some services and increased examination of Sprint fees and charges and cash receipts from Sprint.
AirGate said it believes existing cash, expected results of operations and cash flow from operations will provide sufficient resources to fund its activities through at least June 30, 2004.
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