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ITC^DeltaCom reorganization backed by noteholders, stockholders
New York, Oct. 4 - ITC^DeltaCom, Inc. said its reorganization plan received "overwhelming" approval from all classes of creditors and stockholders.
The West Point, Ga. telecommunications company said the plan was backed by holders of 99.8% of the senior notes that were voted, 100% of the convertible notes, 100% of the preferred stock and 98.3% of the common stock.
A hearing to confirm the plan has been scheduled for Oct. 10. If approved, the company expects to emerge from Chapter 11 later in October.
As previously announced, the plan will eliminate ITC^DeltaCom's $415 million of senior notes in exchange for 81.5% of the reorganized company's common stock and eliminate the $100 million of subordinated convertible notes in exchange for 5% of the reorganized company's common stock. Holders of the existing common stock, the series A preferred stock and series B preferred stock will receive 1% of the reorganized company's common stock.
Campbell B. Lanier, III, a director and current stockholder, Scana Corp., a current stockholder, and other investors have agreed to buy $30 million of a new issue of convertible preferred stock, convertible into 10.5% of the reorganized company's common stock. The purchasers also will receive warrants for up to 2% of the reorganized company's common stock. For their financing commitment, these investors will also receive 2% of the reorganized company's common stock.
There will be a rights offering to existing common and preferred stockholders allowing them to buy some of the convertible preferred stock and warrants that Lanier, Scana and the other investors have agreed to purchase. The amount bought by these investors will be reduced by the size of the rights offering.
After reorganization, ITC^DeltaCom will have $194 million of debt outstanding, made up of its senior credit facility and capital leases, compared to $724 million at March 31, 2002.
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