360networks to acquire Group Telecom
November 19, 2002--360networks, a Toronto-based provider of wholesale and data telecommunications services, announced today that it will acquire Group Telecom (Vancouver), Canada's largest independent, facilities-based telecommunications provider. Terms of the cash acquisition were not disclosed, but will be included in Group Telecom's plan of reorganization.
November 19, 2002--360networks, a Toronto-based provider of wholesale and data telecommunications services, announced today that it will acquire Group Telecom (Vancouver), Canada's largest independent, facilities-base telecommunications provider. Terms of the cash acquisition were not disclosed, but will be included in Group Telecom's plan of reorganization.
"We are very excited about combining these two successfully restructured companies. GT is a leading telecom provider across Canada with tremendous strength in its 13,000 customers, skilled employees, innovative product set, and extensive metro network," said Greg Maffei, 360networks chief executive officer. "Together we will be Canada's largest and most complete full-service competitive telecommunications company."
"This agreement will achieve the best possible result for our customers, employees, and creditors. The transaction will allow our customers to continue to receive leading high-quality, reliable telecommunications services. The combination will allow the highest number of our employees to remain with a growing company," said Dan Milliard, Group Telecom chief executive officer. "And this agreement will produce the best possible recovery for our creditors."
Together, 360networks and GT will have assembled the most extensive competitive telecommunications network assets in Canada. 360networks recently completed lighting its advanced intercity fiber networks in North America connecting 48 major cities in the United States and Canada. Group Telecom offers a full suite of voice and data telecommunications services across 17 metro fiber networks in nine Canadian provinces.
For the quarter ended September 30, 2002, Group Telecom had revenue in excess of C$50 million (unaudited).
This transaction will not involve any significant recovery for the trade creditors of GT Group Telecom Services Corp. and GT Group Telecom Services (USA) Corp. and will involve no recovery for the unsecured lenders or shareholders of GT Group Telecom Inc. Outstanding claims of Group Telecom's unsecured creditors will be dealt with in a Companies' Creditors Arrangement Act (CCAA) Plan of Arrangement associated with the implementation of the transaction.
The two companies reached agreement following a court-authorized, seven-day exclusive negotiating period under the CCAA. Group Telecom first obtained CCAA Court protection on June 26, 2001 in order to restructure its business operations and capital structure. Since June, Group Telecom has been granted additional extensions of its CCAA protection, most recently until December 11, 2002.
The transaction is subject to court approval and regulatory approval. It is anticipated that the transaction will close on or before February 15, 2003. WL Ross & Co. supported 360networks in the transaction by providing a "backstop" for the cash required to complete the acquisition.