Winstar Secures Over $1 Billion in Additional Financing Agreements:
Company Funded Into 2002
NEW YORK--(BUSINESS WIRE)--Nov. 8, 2000--
Receives $270 Million Equity Investment from Microsoft, Compaq,
CSFB Private Equity and Welsh, Carson, Anderson and Stowe
Winstar Communications, Inc. (NASDAQ: WCII), a leading broadband services
company, today announced that it has executed a series of financing agreements
totaling $1.02 billion composed of equity, vendor financing and the expansion of
its senior credit facility. Winstar will use this new capital to fund its
ongoing business plan, which includes the expansion of its broadband network,
products and services.
Equity Investment
As part of these transactions, Winstar entered into a $270 million private
equity investment agreement with Microsoft, Compaq Computer Corporation, CSFB
Private Equity and Welsh, Carson, Anderson & Stowe, VIII, L.P. This investment
is in the form of convertible preferred stock, which converts into common stock
initially at $25 per share, a premium of approximately 20 percent over Winstar's
average share price for the last 30 days, plus five-year warrants to purchase an
aggregate of 4,590,000 shares of common stock at an initial exercise price of
$25 per share. This transaction is the second investment in Winstar by
Microsoft, CSFB Private Equity and Welsh, Carson, Anderson & Stowe; in February
2000, these companies invested a total of $900 million in Winstar.
Senior Bank Credit Facility and Vendor Financing
The $750 million balance of these financing transactions, $500 million of which
is available immediately, includes an increase in Winstar's senior bank credit
facility and new vendor relationships with Cisco Systems, Inc. and Compaq.
Winstar has entered into a Cisco Capital Financing Agreement with Cisco. This
transaction will provide Winstar with additional capital and enhanced access to
best-of-breed technology as the company completes its core network
infrastructure and focuses on enhancing the performance and capabilities at the
edge of its network.
In conjunction with its equity investment, Compaq, the largest supplier of
computing systems in the world, is also providing lease equipment financing
through its wholly-owned subsidiary, Compaq Financial Services, for the ongoing
expansion and development of Winstar's rapidly growing Web hosting and
application service provider (ASP) infrastructure and offerings.
These relationships will complement Winstar's existing strategic partnership
with Lucent Technologies, which provides $2 billion of financing and includes
network planning and building services, voice and data switches, optronics and
network and system integration.
"The transactions announced today, together with our existing cash and the
remaining amount available under the first $1 billion of our Lucent financing,
fully fund our company into 2002, past the point of positive EBITDA, and through
the completion of Winstar's core network infrastructure," said William J.
Rouhana, Jr., chairman and chief executive officer of Winstar. "As we continue
to focus on executing our business plan, we are pleased that our strategic
investors and a growing group of both existing and new world-class vendor
partners are working with us to expand our broadband network and services."
The closing of these transactions are subject to customary closing conditions
and are expected to occur in early December.
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About Winstar
Winstar is a leading broadband services company. The company is rapidly building
one of the world's most widely available, end-to-end broadband networks. Winstar
makes this network important and useful to businesses by providing a
comprehensive set of high-quality, digital-age broadband services. These
services include high-speed Internet and data, Web hosting and design, phone
services, Web-based applications, e-commerce, professional services and
Office.com(R), A Service From Winstar, the top-ranked online business service
for small and medium- sized businesses.
For more information, visit www.winstar.com.
This release contains forward-looking information about management expectations,
strategic objectives, business prospects, anticipated financial or operational
performance, and other similar matters. These statements are based on current
expectations, forecasts and assumptions that involve important risks and
uncertainties. A variety of factors, many of which are beyond Winstar's control,
could cause actual results and experience to differ materially from the
expectations expressed in these statements. These factors include, but are not
limited to, volatility in the financial and capital markets, actions and
initiatives by current and potential competitors, events or circumstances
impacting major customers or suppliers, the effect of current and future
legislation or regulation, the ability of the company to design and construct
its broadband network and to sell and provision services, and additional factors
described in the reports filed by Winstar with the Securities and Exchange
Commission (SEC), including Winstar's Annual Report on Form 10-K for the year
ended December 31, 1999, which is available on the SEC's Web site, at
www.sec.gov. Winstar undertakes no responsibility to update or revise any
statements in this presentation, whether as a result of new information, future
events or otherwise.
Winstar and Office.com are registered trademarks of Winstar Communications, Inc.
CONTACT: WINSTAR, New York
Financial Community:
Daniel Briggs
Vice President, Capital Market Relations
212/792-9032
[email protected]
or
Press:
Kevin Cavanaugh
Director, Media Relations
212/792-9671
[email protected]
