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Primus Telecommunications Group, Incorporated: Primus Telecommunications Executes Forbearance and Waiver Agreement With Term Lo

^{Published on 2009-04-15 14:33:28, Last Modified on 2009-11-03 07:50:27 - Market Wire}
 

MCLEAN, VA--(Marketwire - April 15, 2009) - Primus Telecommunications Group, Incorporated (OTCBB: [ PRTL ]) today announced that it has entered into a forbearance and waiver agreement with a requisite majority of its First Lien Term Loan lenders. As part of the agreement, the Company will file an amended disclosure statement and an amended plan of reorganization incorporating the terms of the agreement on or before April 20, 2009. The agreement requires the parties to accomplish certain milestones, including the execution of a Term Loan Amendment that would provide for improved treatment of the Term Loan lenders upon reinstatement of their debt pursuant to an amended plan of reorganization, subject to certain noteholder consent and Bankruptcy Court approval.

A hearing on the adequacy of the disclosure statement has been scheduled for April 27, 2009. The Company has proposed that votes on the plan of reorganization be received by Financial Balloting Group, the Company's voting agent, by June 5, 2009, unless the deadline is extended. The record date for voting has been proposed for April 27, 2009. Under this schedule, it is proposed that solicitation materials will be mailed to creditors of record on May 4, 2009. Confirmation hearing has been proposed to be scheduled for June 12, 2009.

"I am pleased that we were able to reach agreement with the Term Loan lenders that allows us to move forward with our consensual financial restructuring in an expedited manner," said K. Paul Singh, Chairman and Chief Executive Officer. "We now have secured the approval of all of our major creditor groups that should allow us to complete expeditiously a successful restructuring of the balance sheets of our holding companies without any interference or disruption to our operating subsidiaries. While work remains to be done, the path has become clear."

Primus Telecommunications Group, Incorporated, together with three affiliated holding companies, Primus Telecommunications Holding, Inc., Primus Telecommunications International, Inc. and Primus Telecommunications IHC, Inc. (together, the "Holding Companies"), filed in the District of Delaware voluntary petitions for reorganization and a plan of reorganization on March 16, 2009, and an amended plan of reorganization on April 8, 2009. None of Primus's operating companies in the United States, Australia, Canada, India, Europe and Brazil were included in the filings. All operating units continue to manage and operate their businesses without interruption and employees, customers, suppliers and partners of these operating business units will be unaffected by the restructuring of the Holding Companies.

The Holding Companies have established toll-free and direct dial numbers for parties interested in more information. For callers in the U.S., the number is 866-889-2182. For callers outside the U.S. the number is 310-432-4187. We also can be reached via email at [ ir@primustel.com ].

PRIMUS Telecommunications Group, Incorporated (OTCBB: [ PRTL ]) is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia.

Statements in this press release concerning the plan of reorganization of the Holding Companies and the status of our operating units, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on current expectations, and are not strictly historical statements. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments which are believed to be reasonable as of the date of this filing. Factors and risks that could cause actual results or circumstances to differ materially from those set forth or contemplated in forward-looking statements include, without limitation: (i) the ability of the Holding Companies to reach agreement on a definitive Term Loan agreement amendment, to secure requisite noteholder consent and to consummate the contemplated Chapter 11 plans of reorganization; (ii) the potential adverse impact of the Chapter 11 filings on the operations, management and employees of the Holding Companies and their subsidiaries, and the risks associated with operating businesses under Chapter 11 protection; (iii) the potential need to modify or to amend the contemplated Chapter 11 plan of reorganization, (iv) the potential need to secure an approved debtor-in-possession financing facility; (v) the ability to service substantial indebtedness; (vi) operating business unit and Holding Companies customer, vendor, carrier and third-party responses to the Chapter 11 filings; (vii) potential adverse actions that may be pursued by certain senior lenders including the Term Loan group in the event the Forbearance Agreement is terminated; and (viii) the risk factors or uncertainties listed from time to time in our filings with the Securities and Exchange Commission (including those listed under Item 1, 1.A, 3 and 7 in our annual report on Form 10-K) and with the U.S. Bankruptcy Court in connection with the Companies' Chapter 11 filing, including but not limited to (a) the continuation (or worsening) of trends involving the strengthening of the U.S. dollar, as well as general fluctuations in the exchange rates of currencies, particularly any strengthening of the United States dollar relative to foreign currencies of the countries where we conduct our foreign operations; (b) the possible inability to raise additional capital or refinance indebtedness when needed, or at all, whether due to adverse credit market conditions, our credit profile or otherwise; (c) a continuation or worsening of turbulent or weak financial and capital market conditions; (d) a continuation or worsening of global recessionary economic conditions, including the effects of such conditions on our customers and our accounts receivables and revenues; (e) fluctuations in prevailing trade credit terms due to the Holding Companies' Chapter 11 filings or uncertainties concerning our financial position, or otherwise; and (f) adverse regulatory rulings or changes in the regulatory schemes or requirements and regulatory enforcement in the markets in which we operate and uncertainty regarding the nature and degree of regulation relating to certain services. As such, actual results or circumstances may vary materially from such forward-looking statements or expectations. Readers are also cautioned not to place undue reliance on these forward-looking statements which speak only as of the date these statements were made. We are not necessarily obligated to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.