ONEONTA, AL, March 25, 2013 /CNW/ - Otelco Inc. (NASDAQ: OTT)
(TSX: OTT.un), a wireline telecommunication services provider
in Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and West
Virginia, announced today that on March 24, 2013, the Company filed voluntary
petitions for reorganization under chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware. Otelco filed for
chapter 11 in order to implement its "pre-packaged" financial
restructuring plan - a plan that already has been accepted by 100%
of the Company's senior lenders, as well as holders of over 96% in
dollar amount of Otelco's senior subordinated notes who cast
ballots. Otelco's restructuring plan will strengthen the
Company by deleveraging its balance sheet and reducing its overall
indebtedness by approximately $135
million.
Otelco will maintain normal day-to-day business
operations and continue to provide its customers with quality
services throughout the restructuring. The Company's plan provides
for suppliers and vendors to be paid in full during and after the
restructuring process and for employees to continue to receive
their usual pay and benefits.
Because of the overwhelming support Otelco's
plan has received from both its secured and unsecured creditors
(including holders of the Company's IDS units), Otelco anticipates
that the Company will be able to complete its financial
restructuring at the end of the second quarter of 2013.
"Our proposed plan represents the best possible
outcome for the Company and our IDS unit holders, and I am
gratified that our stakeholders have expressed their support in
overwhelming numbers," stated Michael
Weaver, CEO of Otelco. "Our focus will now be on
quickly implementing the restructuring with no impact on our
day-to-day operations." Implementation of the restructuring plan
and other relief is subject to court approval, regulatory approvals
and other customary closing conditions.
The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its
financial advisor is Evercore Partners. The restructuring
counsel for the administrative agent for the senior lenders is King
& Spalding LLP and its financial advisor is FTI Consulting.
FORWARD LOOKING STATEMENTS
Statements in this press release that are not
statements of historical or current fact constitute forward-looking
statements. Such forward-looking statements involve known and
unknown risks, uncertainties, and other unknown factors that could
impact the Company's restructuring plans or cause the actual
results of the Company to be materially different from the
historical results or from any future results expressed or implied
by such forward-looking statements. In addition to statements
which explicitly describe such risks and uncertainties, readers are
urged to consider statements labeled with the terms "believes,"
"belief," "expects," "intends," "anticipates," "plans," or similar
terms to be uncertain and forward-looking. There can be
no assurance that the restructuring transaction described herein
will be consummated. The forward-looking statements contained
herein are also subject generally to other risks and uncertainties
that are described from time to time in the Company's filings with
the Securities and Exchange Commission.
ABOUT OTELCO
Otelco Inc. 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. With
approximately 98,000 voice and data access lines, which are
collectively referred to as access line equivalents, Otelco is
among the top 25 largest local exchange carriers in the United States based on number of access
lines. Otelco operates ten incumbent telephone companies serving
rural markets, or rural local exchange carriers. It also provides
competitive retail and wholesale communications services through
several subsidiaries. For more information, visit the Company's
website at www.OtelcoInc.com.
SOURCE Otelco Inc.