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Exhibit 99.1
[LOGO OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED]
FOR IMMEDIATE RELEASE
Contact:
-------
Jordan Darrow
PRIMUS Telecommunications
(212) 703-0116
[email protected]
PRIMUS TELECOMMUNICATIONS PURCHASES $98 MILLION OF ITS DEBT SECURITIES AND
AGREES TO EXCHANGE $130 MILLION OF ITS 5 3/4% CONVERTIBLE
DEBENTURES FOR COMMON STOCK
McLEAN, VA -- January 17, 2001 -- PRIMUS Telecommunications Group,
Incorporated (Nasdaq: PRTL), a global facilities-based Total Service Provider
offering an integrated portfolio of data, Internet, e-commerce, applications
hosting and voice services, announced today that it has purchased in the open
market $61.9 million principal amount of its high yield debt for $20.3 million
in cash, $36.4 million of its 5.75% Convertible Debentures (the "Debentures")
due 2007 for $10.5 million in cash proceeds from the issuance of new equity, and
has also agreed with two holders holding an aggregate of $129.6 million in
principal amount of the Debentures to exchange at their request such Debentures
for 8,308,258 newly issued shares of PRIMUS common stock in an exchange
transaction exempt from applicable registration requirements.
In commenting on the transactions, K. Paul Singh, Chairman and Chief
Executive Officer of PRIMUS, stated: "Recent market conditions have put heavy
downward pressure on the securities of many data and telecommunications
companies, and PRIMUS has not been spared. We believe that our securities have
been undervalued by the market. Consequently, by employing a limited amount of
cash and accepting proposals by certain holders of our Debentures, we felt we
had an opportunity to take advantage of the market down cycle to strengthen our
balance sheet on terms attractive to PRIMUS."
As a result of these transactions, PRIMUS has extinguished an aggregate
of $227.9 million of principal amount of debt -- $61.9 million in principal
amount of high yield debt securities and $166.0 million in principal amount of
the Debentures -- plus $97.0 million in future interest payments (assuming the
Debentures were held to maturity), in exchange for $30.8 million in cash
(excluding accrued interest payments) and 8,308,258 shares of common stock. In
particular, the following high yield debt securities were purchased: $48,080,000
principal amount of the 11.75% senior notes due 2004; and $13,800,000 principal
amount of the 12.75% senior notes due 2009.
Mr. Singh added: "We have previously provided guidance that we believe
PRIMUS has adequate cash resources to fund our plan through mid-2002. These
transactions have a neutral impact on that prior guidance because the cash paid
for the securities is essentially offset by the reduced interest payments on the
retired debt during the relevant period."
The Company and/or its subsidiaries will continue to evaluate the most
efficient use of the Company's capital, including investment in the Company's
network and systems, lines of business, potential acquisitions, and, depending
upon market conditions, purchasing, refinancing or otherwise retiring certain of
the Company's outstanding debt and/or equity securities in the open market or by
other means to the extent permitted by its existing covenant restrictions.
PRIMUS Telecommunications Group, Incorporated (Nasdaq: PRTL) is a global
facilities-based Total Service Provider offering bundled data, Internet, digital
subscriber line (DSL), e-commerce, web hosting, enhanced application, virtual
private network (VPN), voice and other value-added services. The Company owns
and operates an extensive global network of owned and leased transmission
facilities, including over 300 IP points-of-presence (POPs) and Internet peering
relationships throughout the world, ownership interests in over 23 undersea
fiber optic cable systems, 23 international gateway and domestic switches, a
satellite earth station and a variety of operating relationships that allow the
Company to deliver traffic worldwide. PRIMUS has been expanding its e-commerce
and Internet capabilities with the deployment of a global state-of-the-art
broadband fiber optic ATM+IP network. Founded in 1994 and based in McLean, VA,
the Company serves corporate, small- and medium-sized business, residential and
data, ISP and telecommunication carrier customers primarily located in the North
America, Europe and Asia-Pacific regions of the world. News and information are
available at the Company's Web site at www.primustel.com.
***
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The statements in this release are "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such statements are based on current
expectations, are not strictly historical statements, and may differ materially
from actual results. Forward looking statements include without limitation,
those regarding management's plans, goals, expectations, guidance, objectives,
strategy, and timing for future operations and products such as roll-out of our
network or data centers, product plans and performance, predictions or
expectations of future growth, management's assessment of market factors, the
availability of financing and future financial performance. Among factors that
could cause actual results to differ materially are changes in business
conditions; changes in the telecommunications or Internet industry or the
general economy or capital markets; DSL, Internet and telecom competition;
changes in service offerings or business strategies; inability to lease space
for data centers at commercially reasonable rates; difficulty in provisioning
Voice over IP services; changes in the regulatory schemes and regulatory
enforcement in the markets in which we operate; restrictions on our ability to
follow certain strategies or complete certain transactions as a result of our
capital structure or debt covenants; the possible inability to raise capital
when needed, or at all; risks associated with PRIMUS's limited DSL, Internet and
web-hosting experience and expertise, entry into developing markets, the
possible inability to hire and/or retain qualified sales, technical and other
personnel, particularly as we continue to attempt to grow our data-centric
services, and managing rapid growth; and risks associated with international
operations (including foreign currency translation risks); dependence on
effective information systems; dependence on third parties to enable us to
expand and manage our global network and operations; and dependence on the
implementation and performance of PRIMUS's global ATM+IP communications network.
These factors are discussed more fully in PRIMUS's public filings, including its
most recent 10Q and 10K filings with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date these statements were made. PRIMUS
disclaims any intention or obligation to update or revise any forward looking
statements, whether as a result of new information, future events or otherwise.
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