FiberTower Commences Exchange Offer for Its 9.00% Convertible Senior Secured
Notes Due 2012
SAN FRANCISCO, Oct. 26 /PRNewswire-FirstCall/ -- FiberTower Corporation
(Nasdaq: FTWR), a wireless services backhaul provider, today announced today
that it has commenced an exchange offer and consent solicitation relating to
any and all of its outstanding 9.00% Convertible Senior Secured Notes due 2012
(the "Existing Notes"). FiberTower is offering to exchange the Existing Notes
for its 9.00% Mandatorily Redeemable Convertible Senior Secured Notes due 2012
(the "Interim Notes"), which will, upon the satisfaction of certain
conditions, be mandatorily redeemable for cash, shares of FiberTower common
stock and new 9.00% Senior Secured Notes (the "New Notes").
As of October 26, 2009, the aggregate principal amount of the Existing Notes
was $278.5 million, and an additional $15.3 million in principal amount of
Existing Notes will be issued on November 16, 2009 in payment of interest due
on the Existing Notes. Holders of approximately 50.1% of the outstanding
principal amount of the Existing Notes have committed to tender their notes in
the exchange offer and to consent to amendments to the Existing Notes that
will eliminate restrictive covenants and provide that the liens securing the
Interim Notes and the New Notes will rank ahead of the liens securing the
Existing Notes, which consents are irrevocable except in certain limited
circumstances. The exchange offer is conditioned upon the satisfaction of
several conditions, including, but not limited to, the delivery of consents
approving the proposed amendments from holders of greater than 50% of the
aggregate principal amount of the Existing Notes.
Pursuant to the terms of the debt exchange offer, the Company's board of
directors will be reduced from nine to seven members upon consummation of the
mandatory redemption of the Interim Notes. Crown Castle will continue to be a
minority investor in FiberTower, and Crown Castle's Executive Vice Chairman,
John Kelly, will be appointed as Chairman of the Board at that time. Phil
Kelley, Crown Castle's Senior Vice President of Corporate Development, will
remain a director. Kurt Van Wagenen, FiberTower's President and Chief
Executive Officer, and Steven D. Scheiwe, President of Ontrac Advisors, will
also remain on the board. Additional directors with wireless industry
experience will be appointed upon completion of the mandatory redemption of
the Interim Notes.
Additionally, FiberTower and Crown Castle have extended their Master Lease
Agreement for another five years, some portions of which will only be
effective upon the mandatory redemption of the Interim Notes. The parties have
also agreed to cooperate on the marketing of FiberTower's backhaul services at
Crown Castle tower sites.
Exchange Offer Terms:
Under the terms of the exchange offer, FiberTower will issue in exchange for
each $1,000 principal amount of Existing Notes that is tendered and accepted,
$1,000 principal amount of Interim Notes. No amounts will be paid in
connection with such tender for any accrued and unpaid interest on the
Existing Notes, but interest will be payable on the Interim Notes from the
date of the interest payment on the Existing Notes immediately preceding the
consummation of the exchange offer.
If all of the outstanding Existing Notes are exchanged for Interim Notes and
the Interim Notes are mandatorily redeemed, FiberTower will pay an aggregate
of $14 million in cash and will issue an aggregate of 336.7 million shares of
FiberTower common stock, representing approximately 69% of outstanding shares
on a fully diluted basis (excluding shares issuable upon exercise of
outstanding stock options and warrants), and $125 million principal amount of
the New Notes. Shareholder approval will be required for the issuance of the
additional shares in the mandatory redemption. No additional amounts will be
paid in such redemption for any accrued and unpaid interest on the Interim
Notes.
The New Notes will mature six years after the mandatory redemption date and
will bear interest at a rate of 9% payable semi-annually. One-third of the
interest on the New Notes will be payable in cash and two-thirds will be
payable in additional New Notes. FiberTower will escrow an amount sufficient
to pay the first six semi-annual cash interest payments on the New Notes.
Assuming that the exchange offer of all Existing Notes and the redemption of
Interim Notes occur, FiberTower's related interest expense will decrease and
debt maturities will be extended compared to the terms of the Existing Notes.
In conjunction with the exchange offer, FiberTower is also soliciting consents
from the holders of the Existing Notes to certain proposed amendments
("Proposed Amendments") to the indenture under which the Existing Notes were
issued. These Proposed Amendments would eliminate or amend substantially all
of the restrictive covenants as well as modify certain events of default in
the Existing Notes indenture and the related collateral agreements. The
Proposed Amendments will also provide that the liens securing the Interim
Notes and the New Notes will rank ahead of the liens securing the Existing
Notes. A tender by any holder in the exchange offer will also constitute an
approval by such holder of the Proposed Amendments. The Proposed Amendments
will not become operative unless and until the exchange offer is consummated.
As of October 26, 2009, the aggregate principal amount of the Existing Notes
was $278.5 million and an additional $15.3 million in principal amount of
Existing Notes will be issued on November 16, 2009 in payment of interest due
on the Existing Notes. Holders of approximately 50.1% of the outstanding
principal amount of the Existing Notes have committed to tender their notes in
the exchange offer and to consent to the proposed amendments, which consents
are irrevocable. The exchange offer is conditioned upon the satisfaction of
several conditions, including, but not limited to, the delivery of consents
approving the Proposed Amendments from holders of greater than 50% of the
aggregate principal amount of the Existing Notes.
Houlihan Lokey Howard & Zukin Capital, Inc. acted as financial advisor to the
Company in connection with the Exchange Offer (the "Financial Advisor"). The
Financial Advisor will not be making any recommendation with regard to the
merits of the Exchange Offer and will not be soliciting, or participating in
any solicitation of, any consents from any holders of Existing Notes in
connection with the Exchange Offer.
The exchange offer is being made pursuant to an exemption from the
registration requirements of the Securities Act of 1933, as amended, contained
in Section 3(a)(9) thereof. The exchange offer will expire at 5:00 p.m., New
York City time, on December 1, 2009, unless the exchange offer is extended or
terminated.
An offering memorandum, related letter of transmittal and other exchange
materials are being distributed to holders of the Existing Notes today, in
which the terms of the exchange offer and consent solicitation are described
in detail. Holders of the Existing Notes are highly encouraged to carefully
read the offering memorandum and related materials as they contain important
information that noteholders should consider before making any decision with
respect to the exchange offer and consent solicitation.
Written materials explaining the full terms and conditions of the exchange
offer will be filed with the Securities and Exchange Commission later today.
The materials are available free of charge at the SEC's website at
www.sec.gov. Additional copies of the offering memorandum, the letter of
transmittal and other exchange materials governing the exchange offer and
consent solicitation may be obtained by contacting the Information Agent, D.F.
King & Co., Inc. toll-free at (800) 714-3313 or collect at (212) 269-5550.
The securities to be offered have not been, and will not be, registered under
the Securities Act of 1933, as amended (the "Securities Act"). The Company is
relying on Section 3(a)(9) of the Securities Act to exempt the exchange offer
from the registration requirements of the Securities Act. This press release
is for informational purposes only and is not an offer to purchase or an
exchange offer or a solicitation of acceptance of the exchange offer. The
exchange offer and consent solicitation are being made only pursuant to the
exchange offer documents that are being distributed to the holders of the
Existing Notes and filed with the Securities and Exchange Commission. The
Company's board of directors is not making any recommendation to holders of
the Existing Notes as to whether they should tender such notes pursuant to the
exchange offer.
About FiberTower
FiberTower is a backhaul and access services provider focused primarily on the
wireless carrier market. With its extensive spectrum footprint in 24 GHz and
39 GHz bands, carrier-class microwave and fiber networks in 13 major markets,
master service agreements with nine U.S. wireless carriers, and partnerships
with the largest tower operators in the U.S., FiberTower is considered to be
the leading alternative carrier for wireless backhaul. FiberTower also
provides backhaul and access services to the government and enterprise
markets. For more information, please visit our website at
www.fibertower.com.
Forward-Looking Statements
This news release includes "forward-looking" statements, as that term is
defined in the Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission, or SEC, in its rules, regulations and
releases. Forward-looking statements relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or trends and
similar expressions concerning matters that are not historical facts. These
include statements regarding, among other things, the exchange offer may not
be consummated, our financial and business prospects, the deployment of our
services, capital requirements, financing prospects, planned capital
expenditures, expected cost per site, anticipated customer growth, expansion
plans, and anticipated cash balances. There can be no assurance that the
exchange offer and the consent solicitations will be completed, either because
the minimum tender conditions to complete the transaction may not be
satisfied, or otherwise. There are many risks, uncertainties and other factors
that can prevent the achievement of goals or cause results to differ
materially from those expressed or implied by these forward-looking statements
including, among other things, negative cash flows and operating losses,
additional liquidity requirements, potential loss of significant customers,
downturns in the wireless communication industry, regulatory costs and
restrictions, potential loss of FCC licenses, equipment supply disruptions and
cost increases, competition from alternative backhaul service providers and
technologies, along with those risk factors described in the Company's Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the
SEC.
Investor Contact:
Gus Okwu / DRG&E
404-532-0086
gokwu@drg-e.com
Company Contact:
Ornella Napolitano, VP and Treasurer
FiberTower Corporation
415-659-3580
onapolitano@fibertower.com
SOURCE FiberTower Corporation
Investors, Gus Okwu of DRG&E, +1-404-532-0086, gokwu@drg-e.com, for FiberTower
Corporation; or Ornella Napolitano, VP and Treasurer of FiberTower
Corporation, +1-415-659-3580, onapolitano@fibertower.com
