Shelton, Conn. -- People's Choice TV Inc., the
wireless communications operator withdrawn a bond restructuring because its' largest
bond-holder has stated it will not accept the terms of the offering.
Instead, People's Choice, which last year decided to
abandon the wireless video business in favor of providing high-speed Internet access via
the MMDS (multichannel multipoint distribution system) spectrum, will seek out a bank loan
for the $25 million it says it needs to develop its business.
The restructuring would have exchanged $85 million in new
13.125 percent senior discount notes due 2003, $42.5 million in cash and 4.9 million
shares of common stock for $332 million in 13.125 percent senior discount notes due 2004.
In addition, the company also planned to exchange $15 million in 13.125 percent senior
subordinated discount notes and 2.6 million shares of its common stock for all of its
outstanding preferred stock.
"We put out an exchange offering about 11 months ago,
and negotiated to deleverage the company -- exchange debt for equity -- and we have
terminated those discussions," said Michael Whalen, vice president of finance and
acquisitions for People's Choice.
Whalen would not identify the bondholder who objected to
the exchange, only saying that it was the company's largest bondholder.
Whalen also would not comment on either bond offering, but
said People's Choice has a $22 million interest payment due on the old notes in
Although People's Choice still provides wireless video
service in Chicago, Houston,
Phoenix, Detroit, St. Louis and Tucson, Ariz., it no longer
is seeking out new video customers. The company sees its high-speed wireless Internet
service, called SpeedChoice, as its biggest growth engine.
Currently available in Phoenix and Detroit, SpeedChoice
offers data rates of up to 10 megabits per second downstream. The company plans to expand
the service into other markets, including Tucson, Houston, St. Louis, Chicago,
Indianapolis, Milwaukee and Salt Lake City in the future. The service is priced at $44.95
per month (including a $10 monthly modem rental) for residential customers.
People's Choice is working on obtaining the $25
million in bank financing, which will be used to finance the build out of its SpeedChoice
service in Phoenix, as well as to launch additional markets.
Whalen said the company has about 2,000 subscribers in
Phoenix, and another 1,000 business users in Detroit. The Phoenix system can serve about
95 percent of the market.
In addition to building out the Phoenix market, the money
also will be used to step up marketing efforts in the Phoenix area for SpeedChoice, Whalen