Alaska Communications Systems Group dropped its revenue expectations for the fourth quarter of 2004 in a Jan. 19 filing with the Securities and Exchange Commission.
New projected revenues for the quarter are set at between $74.5 million and $75 million, a decrease from an estimate of between $76 million and $78 million, the company said.
The decrease is the result of a delay related to an equipment contract, according to the documents. The company expects $1.6 million in revenues from the contract to be reflected in the first quarter of 2005, which will end March 31.
The information in the release had not yet been audited. ACS, which follows a calendar year, plans to issue its audited year-end results in late February.
The company on Jan. 19 also filed with the SEC further information about a proposed stock issue to refinance a portion of its debt. ACS plans to issue $75 million of new common stock and enter into a new credit facility by the end of January.
ACS currently is negotiating with Canadian Imperial Bank of Commerce to serve as the administrative agent for the new credit lines, according to a prospectus filed with the SEC.
The new credit facility will establish a six-year, $50 million revolving credit and a $335 million term loan, maturing as late as 2012, according to the prospectus.
If all the shares offered were sold and the refinancing transactions were completed as planned, then ACS could decrease its long-term debt obligations by 14 percent, while bringing the shareholders' deficit into a shareholders' equity.
If all goes as planned, long-term debt would drop from $533 million to about $458 million. The company's current shareholders' deficit of $28.6 million would move to an equity of $9.4 million.
Representatives for the transaction's underwriters are J.P. Morgan Securities Inc., CIBC World Markets Corp. and Banc of America Securities.
ACS has agreed to sell a number of its shares to those representatives, as well as to Legg Mason Wood Walker Inc., Raymond James and Associates and Wells Fargo Securities. The number of shares and the price were not disclosed in the prospectus.
ACS, its executive officers, directors and those of Fox Paine and its affiliates have entered into a lock-up agreement with the underwriters saying that they won't sell or trade any of their stocks for 90 days without written consent from J.P. Morgan.
ACS in December filed documents with the SEC stating that Fox Paine and Co. may sell its 64 percent stake in the company. The company has two years to act on the filing.
Because J.P. Morgan and CIBC are lenders of the existing credit facility, they will receive a portion of the proceeds from the term loan borrowings under the new loan agreement, which will be used to repay the existing debt. More than 10 percent of the proceeds of the offering may be received by those affiliated with the underwriters.
ACS late last year adopted a dividend policy to distribute a portion of its cash. The company paid the first dividend on Jan. 19 of 18.5 cents per share. It plans to pay quarterly dividends at an annual rate of 74 cents a share for the first year.
"We believe that our dividend policy will limit, but not preclude, our ability to pursue growth," according to the prospectus. "If we continue paying dividends at the level currently anticipated under our dividend policy, we expect that we would need additional financing to fund significant acquisitions or to pursue growth opportunities requiring capital expenditures significantly beyond our current expectations. However, we intend to retain sufficient cash after the distribution of dividends to permit the pursuit of growth opportunities that do not require material capital investment."
More SEC filings disclosing additional information about the sale were expected through the end of January.
