Bankrupt Otelco announced that it emerged from bankruptcy and completed its balance sheet restructuring process, including an extension of its senior credit facility. According to an 8K filing dated May 24, 2013, GE Capital served as agent in the financing.
“Today, we completed the actions necessary to implement the final steps of our restructuring plan,” said Mike Weaver, president and chief executive officer of Otelco. “Our total debt has been reduced by more than 50%, our senior credit facility has been extended through April 2016, and we have exited Chapter 11 bankruptcy. Our customers have been provided uninterrupted service during our restructuring, and our vendor partners have continued to receive payment in full for the goods and services they provide Otelco.”
The company repaid $28.7 million on its senior credit facility and extended its maturity through April 2016. The remaining balance of $133.3 million will have quarterly principal payments of 1.25% of the new loan amount plus interest on the outstanding balance at 6.5%. In addition, the company will utilize 75% of its quarterly free cash-flow to further reduce the outstanding balance on the loan each quarter. The facility includes a $5 million revolver which was undrawn at closing. These actions complete the requirements of the company’s pre-packaged plan and allowed Otelco to exit bankruptcy.
Otelco provides wireline telecommunications services in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West Virginia. The company’s services include local and long distance telephone, network access, transport, digital high-speed data lines and dial-up internet access, cable television and other telephone related services.
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