Xecom Corp. Announces $30 Million Refinance
The new financing package was obtained through First Continental Capital Corporation of Dallas, Texas acting as Trustor for First Security Bank, National Association of Salt Lake City, Utah, Trustee for the owner/lender.
Terms of the financing, which has been utilized to eliminate all prior long term financing and construction advances from Fujitsu Business Communication Systems (FBCS) and Sprint Corporation L.P., include a 74 month payment period; a substantially lower effective interest rate; and a total payment deferral of over 10 months.
The financing is also expandable to accommodate construction at new bases and for additions to existing base installations, pending the approval of Sprint Corporation under amendment provisions of the existing SSI military subcontract.
Joseph C. Vigliarolo, Xecom CEO, stated that "the new financing package culminates a full year of effort to restructure provisions of the initial SSI subcontract, and to bring the payments for prior Base Construction in line with anticipated growth of revenues from an expanding base of military customers."
Mr. Vigliarolo credited the completion of the financing, primarily to the efforts of Dennis Casey who has operated in a Chief Executive capacity for SSI since September 4, 1996. He said, "Mr. Casey's primary focus has been on subcontract restructure, margin improvement, and refinancing, including various guarantees and payment deferrals."
Mr. Casey's Telecommunication experience includes seven years as Vice President of Marketing for GTE Corporation's Telephone Operations with annual revenues exceeding $10 billion. He also previously raised over $100,000,000 in various equity and debt financing for two telecommunications companies which he founded.
Mr. Vigliarolo added that, "under a new three year contract with Xecom, Mr. Casey will direct and focus SSI's efforts as follows:
1) Revenue expansion at existing and new bases, under the ten year AAFES
2) Launching a (9-15-97) new "FaMilitary" Program directed toward families of military personnel wherein family-related, long distance calls (collect and/or credit card) calls may be initiated by a soldier, but billed to pre-approved family members.
3) Directing SSI's entry and expansion in the CLEC market where the company will immediately file for "facilities based" CLEC status, permitting it to participate in the sharing of Originating and Terminating Access Fees as paid by long distance carriers for current long distance traffic generated by Military Personnel participating in the AAFES program.
4) Selecting and prioritizing CLEC end office construction and Internet opportunities including the potential partnering with various Telecommunication Organizations and/or Switch Manufacturers.
5) Initiating large scale reductions in local trunking costs by rerouting existing traffic over the Sprint Network and by converting existing local trunk terminations to long distance access trunks for Dial Around (1-800) traffic coincident with the achievement of CLEC status.
Mr. Vigliarolo closed stating that "the company has become current on all accounts payable; continues to maintain a positive cash flow; and expects to achieve operating profitability prior to the end of the 10 month payment- deferral period." He added that, "substantial Engineering and Construction has already been completed at Ft. Knox, Ft. McPherson, and Redstone Arsenal which are part of a twelve-base expansion forecast over an 18 month period."
Xecom Corp., through its wholly owned subsidiary, Select Switch Systems, Inc., installs, maintains and operates turnkey residential barracks telecommunications services through a 10-year exclusive subcontract agreement with Sprint Corporation L.P., to the nation's Army and Air Force installations.
Certain statements in this press release may include forward-looking comments regarding among other things, availability of funding, technical and business progress. The Company's actual results may vary materially from those forward-looking statements due to risks and uncertainties to which the Company is subject such as delays in installations, failure to meet milestones or other obligations under collaborative agreements and other risks, which are described in the Company's Form 10.
SOURCE Xecom Corporation
/CONTACT: Financial Internet Group, 760-770-7133 or Toll Free: 888-770-7133/
CO: Xecom Corporation ST: California IN: TLS SU: FNC
ML-JP -- LAM057 -- 0898 08/25/97 15:27 EDT http://www.prnewswire.com