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Equalnet Communications Raises $3.4 Million Equity for Cash Portion of SA Telecommunications Inc.

 Major Strategic Step for Established Telecom Services Provider


HOUSTON, May 5 /PRNewswire/ -- Equalnet Holding Corp. (Nasdaq: ENET), a national facilities-based long-distance telecommunications provider, today announced the completed private placement of 3.4 million shares of common stock and warrants to purchase 170,000 additional shares of common stock, with James R. Crane, a private investor for $3.4 million. This private placement was initiated and committed to in March 1998 and follows the previously announced investment in Equalnet by the Willis Group.

Proceeds of the $3.4 million from the sales of securities are expected to be used for general corporate purposes and to partially fund the cash portion of the proposed purchase by Equalnet of substantially all of the assets of SA Telecommunications Inc. The closing of the acquisition is subject to approval by Equalnet's shareholders and certain regulatory authorities.

"The successful and on-schedule completion of our private placement as well as our pending acquisition of SA Telecommunications is clearly indicative of our expansion strategy to return the company to profitability," said Robert H. Turner, President and Chief Executive Officer of Equalnet. "We believe Equalnet's mission of providing end-to-end telecommunications solutions while expanding its customer base via telecom acquisitions is significantly enhanced with this new investment."

Equalnet's core strategy is to build relationships with small to medium- sized business customers by offering a wide range of telecommunications products and services; and acquire companies with complementary business lines serving small to medium-sized businesses.

"We are pleased by the market's acceptance of the company's progress in implementing its strategy," added Dean H. Fisher, Senior Vice President and General Counsel of Equalnet, "and we believe this is reflected in Equalnet's recent stock price increase."

Equalnet has made a number of important announcements including receiving more than $20 million in new shareholder equity including cash, assets and converted debt and elected Robert H. Turner, an industry expert with more than 25 years telecommunications experience, as its President and Chief Executive Officer.

About Equalnet

Headquartered in Houston, Texas, Equalnet is a nationwide telecommunications company employing approximately 100 people in the Houston area and in its California sales office. The company provides a comprehensive array of discounted long-distance telecommunications services. Equalnet owns and operates a domestic network utilizing digital telecommunications switches deployed in eight major United States cities.

This press release includes "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Equalnet's business plans, strategy and objectives are forward looking statements. The company believes the expectations reflected in the forward looking statements are reasonable. Equalnet can provide no assurance such expectations will prove correct. Factors that could cause actual results to differ materially from the plans are Equalnet's ability to implement its growth and acquisition strategies, secure competitive financing and general economic and competitive factors in the rapidly changing telecommunications industry. This press release should be read in conjunction with Form 8-K, filed with the SEC, March 5, 1998, that details new stockholder equity and acquisitions; Form 10-Q for the quarterly period ended December 31, 1997, filed February 16, 1998 and Form 10-K for the year ended June 30, 1997, filed with the SEC September 24, 1997 (all file number 0-25842).

SOURCE Equalnet Holding Corp.
 -0- 05/05/98


/CONTACT: Ilene Kaminsky, Media, 281-549-4759, ilenek@equal.net, or Dean H. Fisher, Investors, 281-549-4648, deanfisher@wp.enc.net, both of Equalnet/

(ENET)

CO: Equalnet Holding Corp. ST: Texas IN: TLS SU:

MD-ML -- CGTU069 -- 9283 05/05/98 18:55 EDT http://www.prnewswire.com
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Publication:PR Newswire
Date:May 5, 1998
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