e.spire files for bankruptcy protection
As a competitive local exchange carrier, or CLEC, e.spire's core business is providing local and long distance telephone service to small to medium sized businesses. Through its subsidiaries ACSI Network Technologies and CyberGate, Inc./ValueWeb, it builds and leases fiber networks and provides Web hosting and colocation services.
"e.spire will use this period to complete the reorganization of our finances and the equitization of our bondholder debt," said George F. Schmitt, e.spire Chairman and Acting Chief Executive Officer. "We have been working closely with an informal committee of bondholders, representing more than 70% of our unaffiliated bondholders, and have received strong indications of support for a rapid restructuring."
"During this period, the management team, which has been in place since last April, will continue to lead the business," added Schmitt. "This team, along with all the employees of e.spire, has continually reduced operating expenses and increased revenues, resulting in e.spire's achievement of positive adjusted EBITDA for the first time in the fourth quarter of 2000."
e.spire also announced that it has secured a commitment for up to $85 million of debtor-in-possession (DIP) financing from a group led by Foothill Capital and Ableco Finance, LLC and including e.spire Chairman George Schmitt. The Company indicated that it believes that these funds will be sufficient to complete the restructuring process.
"We will continue to serve all of our customers without interruption," said Bradley E. Sparks, e.spire Chief Financial Officer. "It will be business as usual while we complete our reorganization. We expect a smooth transition when we emerge in a few months. We will have a strong balance sheet and, due to the expected equitization of our bonds, will be within sight of profitability."
e.spire Communications, Inc. is a leading integrated communications provider, offering traditional local and long distance, dedicated Internet access, and advanced data solutions, including ATM and frame relay. e.spire also provides Web hosting, dedicated server, and colocation services through its Internet subsidiary, CyberGate, Inc., and its subsidiary ValueWeb.
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. More information about e.spire is available at e.spire's Web site, www.espire.net.