SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 3, 2000
e.spire Communications, Inc.
(Exact name of registrant as specified in its charter)
State of Delaware 0-25314 52-1947746
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) Identification No.)
133 National Business Parkway, Suite 200
Annapolis Junction, Maryland 20701
(Address of Principal Executive (Zip Code)
Offices)
(301) 361-4200
(Registrant's telephone number,
including area code)
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Item 5. Other Events
On February 3, 2000, e.spire Communications, Inc. issued a press release
announcing that it has signed commitment letters with Greenwich Street Capital
Partners II, L.P. (GSC Partners) and The Huff Alternative Income Fund, L.P.
for a total of $125 million in new equity funding. e.spire will issue 125,000
shares of convertible preferred stock and 5.5 million warrants.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Number Reference
(99) Additional Exhibits
Press Release dated February 3, 2000 Exhibit 99.1
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
e.spire Communications, Inc.
By:
Date: February 14, 2000 /s/ Riley M. Murphy
------------------------------------------
Riley M. Murphy, Executive Vice President
Legal and Regulatory Affairs and Secretary
<PAGE>
Exhibit 99.1
e.spire Receives $125 Million Funding Commitment;
EXPECTS UP TO $75 MILLION Follow-on Investment
ANNAPOLIS JUNCTION, MD, FEBRUARY 3, 2000--e.spire Communications, Inc.
(NASDAQ: ESPI), the communications company for the networked economy,
announced today that it has signed commitment letters with Greenwich Street
CapitalPartners II, L.P.(GSC Partners) and The Huff Alternative Income Fund,L.P.
for a total of $125 million in new equity funding. e.spire will issue
125,000 shares of convertible preferred stock and 5.5 million warrants.
Each share of preferred stock will be initially convertible into 126.4
shares of common stock (an effective conversion price of $7.91 per share), and
each warrant will be initially exercisable for one share of common stock (at an
initial exercise price of $9.89 per share). These prices were based on a premium
to a recent 20-day average closing price of the Company's stock.
e.spire also expects to seek up to an additional $75 million in those securities
on the same terms. Additional purchasers will be requested to commit to purchase
the securities by March 6.
The Company expects to issue the $125 million of preferred stock and warrants in
two tranches. The first tranche is expected to be completed in February. The
second tranche is subject to shareholder approval, and the Company intends to
call a special meeting as soon as practicable to obtain such approval.
Upon shareholder approval, preferred stock and warrants of the second tranche of
the $125 million will be issued on the same terms and conditions as the first
tranche. If the Company does not receive shareholder approval, GSC Partners and
Huff will not be obligated to purchase shares in the second tranche and the
shares of preferred stock issued in the first tranche would be subject to a
significant increase in the dividend rate and an increase in the per share
conversion price of shares issued as PIK dividends.
William R. Huff, founder of The Huff Alternative Income Fund and Chairman of
e.spire, commented on his firm's investment, "As e.spire has substantially
completed its geographic expansion and network construction activities, we will
now focus on a success-based capital deployment model that emphasizes
profitability." Huff continued, "We will review value-enhancing strategies with
regard to our wholly-owned ACSI Network Technologies and CyberGate subsidiaries,
along with each of our local markets. We will also seek to exploit the value of
our nationwide ATM data network as demand continues to accelerate for the
services e.spire is uniquely positioned to provide."
If both tranches of the securities are issued, the issuance would satisfy
certain requirementsunder the Company's credit facilities and recently completed
vendor financing and will permit the Company to borrow additional amounts under
the facilities,subject to compliance with customary borrowing conditions.
The commitment letters are subject to a variety of closing conditions, including
negotiation and execution of definitive documentation and the absence of any
material adverse change with respect to the Company.
GSC Partners is a New York-based private-equity firm founded in 1994 that
manages $2 billion of equity capital.
e.spire Communications, Inc. is a leading integrated communications provider,
offering traditional local and long distance, Internet access and Web-hosting
services, and advanced data solutions, such as ATM and frame relay. In addition,
e.spire's subsidiary, ACSI Network Technologies, Inc., provides third parties,
including other communications concerns, municipalities and corporations, with
turnkey fiber-optic design, construction and project management expertise. For
more information on e.spire, contact http://www.espire.net.
Contact:
Media Relations Investor Relations
Peggy Disney Tania Almond
703.639.6738 301.361.4800
[email protected] [email protected]
Certain statements regarding the development of the Company's businesses, the
markets for the Company's services and products, the Company's anticipated
capital expenditures, anticipated EBITDA and other statements are
forward-looking statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995) which can be identified as any statement that
does not relate strictly to historical or current facts. Forward-looking
statements use such words as plans, expects, will, will likely result, are
expected to, will continue, is anticipated, estimate, project, believes,
anticipates, intends and expects, may, should, continue, seek, could and other
similar expressions. Although the Company believes that its expectations are
based on reasonable assumptions, it can give no assurance that its expectations
will be achieved. The important factors that could cause actual results to
differ materially from those in the forward-looking statements herein (the
"Cautionary Statements") include, without limitation, the Company's degree of
financial leverage, risks associated with debt service requirements and interest
rate fluctuations, risks associated with acquisitions and the integration
thereof, the impact of restriction under the Company's financial instruments,
dependence on availability of transmission facilities, regulation risks
including the impact of the Telecommunications Act of 1996, contingent
liabilities, the impact of competitive services and pricing, the ability of the
Company to successfully implement its strategies, as well as the other risks
referenced from time to time in the Company's filings with the SEC, including
the Company's Form 10-K for the year ended December 31, 1998. All subsequent
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
Cautionary Statements. The Company does not undertake any obligation to release
publicly any revisions to such forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.