WEST POINT, GEORGIA - ITC-DeltaCom Inc., which sells integrated telecommunications and technology packages in the Southeast, announced Tuesday it has filed for Chapter 11 protection from creditors in U.S. Bankruptcy Court in Delaware. <br>
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The company said it had agreed with members of an unofficial committee of holders of the company's senior notes and subordinated convertible notes to implement a reorganization. <br>
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The proposed plan will result in the elimination of approximately $515 million in principal amount of the company's senior and subordinated note debt, and the creditors will receive 86.5 percent of the common stock, the company said. <br>
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The Chapter 11 filing includes only the parent company, ITC-DeltaCom Inc. Operating subsidiaries, including Interstate FiberNet Inc. and ITC-DeltaCom Communications Inc., are not part of the bankruptcy proceeding. <br>
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The company said that during the reorganization process, the company will continue to provide retail and wholesale customers with a bundle of communications solutions and services. Vendors will continue to be paid and the company's management will remain in place, officials said. <br>
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Under the terms of the proposed reorganization, the company expects that its total indebtedness will be reduced from about $724 million as of March 31 to approximately $194 million of indebtedness under its senior credit facility and capital leases. <br>
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As a result, the company estimated that its 2002 annual interest expense on a pro forma basis will decrease from approximately $55 million to between approximately $11 million and $13 million.
