Primus Obtains Additional Financing

Service provider increases line of credit with RFC Capital Corp. to approximately $30 million. RFC Capital focuses on lending to telecoms companies.

by Roy Mark of www.internetnews.com [April 12, 2002]

Primus Telecommunications Group, Inc., a facilities-based service provider with a portfolio of voice, data, Internet, and hosting services, has received additional funding through an increase in its existing credit line with RFC Capital Corp., a division of Textron Inc. The estimated net cash proceeds of $10 million increases the existing line of credit to approximately $30 million.

The company also announced that it has reduced its existing vendor debt and related future commitments by $19.5 million. Through a settlement agreeing to pay $5 million in cash, Primus will pay an additional $1.5 million by April 2, 2003, and has issued 1.2 million shares of common stock to the vendor for the elimination of $17.8 million in existing vendor debt and $1.7 million in future related service obligations.

The vendor debt had interest payments of $1.2 million in 2002, and its retirement represents an additional $1.4 million in future interest savings (assuming the vendor debt was held to maturity) as well as the elimination of principal payments which were scheduled to have been made over the next four years.

"We are pleased to report these transactions as the latest development in Primus's continuing efforts to reduce debt, improve cash flow and increase liquidity," said K. Paul Singh, chairman and chief executive officer of the company.

Primus owns and operates an extensive global backbone network of owned and leased transmission facilities, including over 300 IP points-of-presence (POPs) throughout the world, ownership interests in over 23 undersea fiber optic cable systems, 23 international gateway and domestic switches, and a variety of operating relationships that allow the company to deliver traffic worldwide.

The company has been expanding its e-commerce and Internet capabilities with the deployment of a broadband fiber optic ATM+IP network.

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