e.spire Secures $125 Millon in Equity Financing

In a series of financial moves, integrated communications provider arranges for sufficient capital to fund business plan well into the first quarter of next year.

by Roy Mark
of dc.internet.com
[September 20, 2000]

Internet and long distance provider e.spire Communications, Inc. (NASDAQ:ESPI) is securing additional funding commitments including an immediate $50 million from the sale of exchangeable preferred stock. Additionally, the company has also signed commitment letters with the Huff Alternative Income Fund, L.P., Greenwich Street Capital Partners II, L.P., and Honeywell International Inc. Master Retirement Fund to purchase another $75 million in preferred stock as funding is needed by e.spire.

The company also announced that it and its syndicated bank group have signed the final agreement amending its senior secured credit facility. The company will repay $10 million of principal on the credit facility Wednesday, leaving a fully drawn balance of $139 million outstanding.

"We are pleased with both of these developments. The infusion of equity gives us additional financial stability and flexibility," said Bradley E. Sparks, e.spire's chief financial officer. "It gives us sufficient capital to fund our business plan well into the first quarter of next year, demonstrates to the investment community that e.spire continues to have strong, committed financial backers, and opens up new funding channels to us. And, importantly, as evidenced by the new bank agreement, we have the ongoing support of our senior lenders."

e.spire Communications is an integrated communications provider, offering traditional local and long distance, dedicated Internet access and advanced data solutions, such as ATM and frame relay. The company also provides dial-up Internet through its wholly-owned Internet service provider, CyberGate, Inc., and Web hosting services through CyberGate's subsidiary, ValueWeb.

In addition, ACSI Network Technologies, Inc., another e.spire subsidiary, provides third parties, including other communications concerns, municipalities and corporations, with turnkey fiber-optic design, construction and project management expertise.

"The signing of the bank agreement is a significant milestone for us," added George F. Schmitt, e.spire's chairman and acting chief executive officer. "With this negotiation behind us, we can now turn our full attention to closing other arrangements that will bring new investment to the company."

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