XO
Communications Raises $200 Million Through Preferred
Stock Offering [August 9, 2004]
RESTON,
Va., Aug 9, 2004 /PRNewswire-FirstCall via COMTEX/ --
XO Communications, Inc. (OTC Bulletin Board: XOCM.OB)
today announced that it completed a private placement
of 6% Class A Convertible Preferred Stock and has received
total proceeds of $200 million. XO privately offered
the shares of preferred stock to XO stockholders that
currently hold an aggregate of approximately 85% of
XO's outstanding common stock. Affiliates of Carl C.
Icahn, XO's chairman and owner of approximately 50%
of XO's outstanding common stock, purchased $190 million
of the preferred stock, and an affiliate of Amalgamated
Gadget, L.P., holder of approximately 9.4% of XO's outstanding
common stock, purchased an additional $10 million.
"This agreement demonstrates continued
support for XO's ability to execute in the market and
our goal of achieving free cash flow positive,"
said Carl Grivner, XO Communications' CEO. "The
proceeds will be used for our ongoing operations, continued
investments in new customer solutions like voice over-IP
services and potential acquisitions that would provide
our business with additional scale and cost synergies."
Each share of preferred stock is initially
convertible at $4.62 per share into 10.82251 shares
of XO common stock. XO's common stock closed on August
5, 2004 at a trading price of $3.62 per share. The preferred
stock private placement was negotiated on behalf of
XO by a special committee of its Board of Directors
consisting of its independent directors, who received
independent legal and financial advice.
Based on the company's review of its
business and giving effect to the proceeds from the
convertible preferred stock offering, XO believes that
it will not be required to raise additional capital
to fund its current business plan, subject to funding
requirements that may arise in connection with possible
future acquisitions.
About XO Communications
XO Communications is a leading provider
of national and local telecommunications services to
businesses, large enterprises and telecommunications
companies. XO offers a complete portfolio of services,
including local and long distance voice, dedicated Internet
access, private networking, data transport, and Web
hosting services as well as bundled voice and Internet
solutions. XO provides these services over an advanced,
national facilities-based IP network and serves more
than 70 metropolitan markets across the United States.
For more information, visit http://www.xo.com.
The statements contained in this release
that are not historical facts are "forward-looking
statements" (as such term is defined in the Private
Securities Litigation Reform Act of 1995). These statements
include those describing XO's expected future business
and network operations and results of operations, XO's
ability to achieve projected synergies and revenue from
the acquisition of allegiance's assets in a timely manner
or at all, XO's ability to increase sales, and XO's
ability to continue to implement effective cost containment
measures. Management cautions the reader that these
forward- looking statements are only predictions and
are subject to risks and uncertainties and actual results
may differ materially from those indicated in the forward-looking
statements as a result of a number of factors. These
factors include, but are not limited to, those risks
and uncertainties described from time to time in the
reports filed by XO Communications, Inc. with the Securities
and Exchange Commission, including its Annual Report
on Form 10-K for the year ended December 31, 2003 and
its quarterly reports on Form 10-Q.
SOURCE XO Communications, Inc.
Chad Couser of XO Communications, Inc.,
+1-703-547-2746, or
chad.couser@xo.com |
