Level 3 raises USD500m for acquisitions

8 July 2002 -- Level 3 Communications Inc is raising USD500m for "acquisitions relating to industry consolidation opportunities".

8 July 2002 -- Level 3 Communications Inc is raising USD500m by selling convertible notes (payable at 9% interest, due 2012) to three institutions: Longleaf Partners Funds (USD300m), Berkshire Hathaway Inc (USD100m), and Legg Mason Inc (USD100m). Legg Mason became Level 3's largest shareholder last year. The notes are equivalent to 27% of Level 3's stock.

Level 3 says it will use the proceeds for "acquisitions relating to industry consolidation opportunities". The investment gave Level 3 a cash and marketable securities balance of about USD1.5bn at the end of June.

"The on-going shakeout is creating extraordinary opportunities, as telecommunications companies, their network assets and customer bases become available," said CEO James Q Crowe.

Berkshire Hathaway chairman Warren Buffett adds: "Liquid resources and strong financial backing are scarce and valuable assets in today's telecommunications world...Level 3 is well equipped to seize important opportunities that are likely to develop in the communications industry."

"Demand for communications services continues to grow at the same time that the number of service providers is shrinking," notes Legg Mason Funds Management CEO Bill Miller.

www.level3.com

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