McLeodUSA Emerges from Chapter 11
By Multi Channel News Staff -- Multichannel News, 4/18/2002 10:34:00 AM
McLeodUSA Inc. successfully escaped from the trenches of bankruptcy-protection proceedings.
The competitive local-exchange carrier's security holders approved an amended reorganization plan, calling for McLeodUSA to distribute $670 million in cash to its senior-note holders. These note holders will receive new preferred series-A stock and warrants.
As part of the deal, McLeodUSA will also distribute new common stock to its old preferred shareholders.
The company's stock resumed trading on the NASDAQ exchange Thursday -- trading was halted Jan. 30. The stock last traded at 18 cents per share.
Buyout firm Fortsmann Little & Co. has upped its equity-investment commitment to $175 million in exchange for a 23 percent stake of the reorganized CLEC.
Including the preferred stock stake it already holds, Fortsmann has increased its stake in the company to 58 percent, making it the largest McLeodUSA shareholder.
McLeodUSA also entered a five-year revolving-credit facility valued at $110 million. The bank group is led by J.P. Morgan Chase & Co., Bank of America LLC and Citibank.
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