Superior TeleCom amends loan, lowering payments, changing covenants

By Sara Rosenberg

New York, Sept. 18 - Superior TeleCom Inc. amended its senior secured credit facility agreement, reducing principal amortization, adjusting financial covenant requirements through 2003 and allowing for the sale of Superior's electrical wire business and its 51% equity interest in Superior Cables, Ltd. to The Alpine Group, Inc.

Under the amendment, all scheduled term loan principal amortization requirements for the balance of 2002 and for the first six months of 2003 were eliminated. Principal amortization for the second half of 2003 has been rescheduled and reduced to $35 million. All in all, scheduled principal amortization requirements through Dec. 2003 have been reduced by upwards of $225 million, compared to existing principal amortization requirements. A $50 million term loan payment will be required on Jan. 15, 2003 if holders of the company's $200 million subordinated notes do not agree to continue to receive non-cash interest on the notes through 2003.

The maturity date of the facility has been moved up to May 2004 at which time all outstanding amounts under the bank loan are due. "However, we anticipate that this time frame should allow the Company sufficient time to implement a refinancing or recapitalization plan prior to May 2004," said David Aldridge, chief financial officer, in a news release.

"The amendment creates further financial flexibility for Superior as it operates through the economic and telecom downturn and it positions an asset sale of non-core businesses that results in a substantial deleveraging and captures significant tax benefits that would not be available post year-end," said Steven S. Elbaum, chairman and chief executive officer (who is resigning as CEO on Dec. 31), in the release. "I am pleased that we were successful in securing broad support from the bank group for the amendment, which is in the best interests of all stakeholders. The amendment enhances Superior's liquidity and its ability to invest in its business, as well as maintain and extend a leadership position in its core magnet wire and communications cable sectors."

Furthermore, the company has entered into a commitment letter with GE Commercial Finance for a $160 million multi-year accounts receivables securitization financing facility, which will replace the existing receivables securitization financing facility expiring Oct. 31, 2002.

The East Rutherford, N.J. wire and cable manufacturer anticipates receiving approximately $120 million in aggregate cash proceeds from the sale of its electrical wire business and its 51% equity interest in Superior Cables, Ltd. Proceeds will be used to repay borrowings under the credit facility and accounts receivable securitization facility.

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