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DSL net Gains $30 Million of New Financing - Stock Soars
Connecticut based national ISP receives new financing from Deutsche Bank
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CONNTACT.COM
7/22/2003
By: Mitchell Young
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DSL.net has closed a $30 million financing with institutional investors led by Deutsche Bank. VantagePoint Venture Partners, one of DSL.net's current major institutional shareholders, is the other participant in the financing.
"This investment, led by such a prominent institutional investor as Deutsche Bank, further validates our belief that DSL.net is well-positioned to expand its business, generate cash flow and create significant value for its shareholders," said David F. Struwas, chairman and chief executive officer of DSL.net., based in New Haven.
Shares of the stock soard by 28% to a $1.28 per share just as the NASDAQ was annoucing a de-listing due to the share price trading under $1.00
According to the company the new financing will fund it to a cash-flow positive position based on its current plans and projections. The company added the majority of the proceeds are expected to be used to accelerate the roll out of DSL.net's recently introduced integrated voice and data product offering over the Company's extensive broadband network in the Mid-Atlantic and Northeast regions, fund strategic acquisitions and retire outstanding debt at a discount.
The financing package is comprised of $30 million of three-year senior secured notes, bearing interest at 1.23% per annum, and warrants to purchase approximately 158 million shares of DSL.net common stock for $.38 per share. The warrants are exercisable for three years. Warrants to purchase approximately 13 million shares were issued in connection with the initial closing.
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