FiberTower (FTWR) to Miss $1.3M Semi-Annual Interest Payment; Chairman Kelly Resigns
Tweet
Share
E-mailGet Alerts FTWR Hot Sheet
Join SI Premium – FREE
FiberTower Corporation (Nasdaq: FTWR), announced that it had elected not to make the $1.3 million semi-annual interest payment due on November 15, 2011, with respect to its 9.00% Convertible Senior Secured Notes Due 2012 (CUSIP Nos. 31567RAA8 and 31567RAC4) (the "2012 Notes"). The indenture governing the 2012 Notes provides that the failure to make such payment constitutes an event of default after a 30-day cure period. This missed interest payment will not trigger any significant cross-default provisions associated with other outstanding FiberTower debt prior to the expiration of the cure period. During such cure period, FiberTower will continue to evaluate different options to manage its debt load.
Further, Chairman of the Board, John Kelly and another Board member, Phil Kelley, resigned from the Company's board of directors; on November 15, 2011, another director, Randall Hack, resigned from the Company's board of directors. These resignations were effective immediately and were not the result of a disagreement with FiberTower on any matter relating to FiberTower's operations, policies or practices.
FiberTower has also determined that material impairment charges relating to its long-lived assets and FCC licenses will be required under generally accepted accounting principles as a result of events occurring in the quarter ended September 30, 2011.
As a result of continued customer early service terminations experienced in the quarter ended September 30, 2011, the Company's decisions to limit investment in its legacy network, and the Company's estimates of future cash flows expected to be generated by its network as compared to its carrying value, FiberTower determined that its network equipment and construction-in-progress were impaired. Accordingly, during the third quarter of 2011, FiberTower conducted an evaluation to quantify the level of impairment. Although the Company has not been able to finalize the quantification of the impairment charges relating to its network equipment and construction-in-progress, the Company estimates the impairment charges for these assets in order to reduce network equipment and construction-in-progress to their fair value and as calculated in accordance with GAAP, to be in the range of $150 to $170 million in the third quarter of 2011.
As previously announced, FiberTower filed a Notification of Late Filing, or Form 12b-25, with the Securities and Exchange Commission with regard to its third quarter 2011 Form 10-Q report. This allowed the Company an additional five calendar days to file the Form 10-Q, which was otherwise due on November 9, 2011, and which expired on November 14, 2011. The Company continues to be unable to file its Form 10-Q for the quarter ended September 30, 2011, as a result of its inability to quantify the impairment charges discussed above.
Further, Chairman of the Board, John Kelly and another Board member, Phil Kelley, resigned from the Company's board of directors; on November 15, 2011, another director, Randall Hack, resigned from the Company's board of directors. These resignations were effective immediately and were not the result of a disagreement with FiberTower on any matter relating to FiberTower's operations, policies or practices.
FiberTower has also determined that material impairment charges relating to its long-lived assets and FCC licenses will be required under generally accepted accounting principles as a result of events occurring in the quarter ended September 30, 2011.
As a result of continued customer early service terminations experienced in the quarter ended September 30, 2011, the Company's decisions to limit investment in its legacy network, and the Company's estimates of future cash flows expected to be generated by its network as compared to its carrying value, FiberTower determined that its network equipment and construction-in-progress were impaired. Accordingly, during the third quarter of 2011, FiberTower conducted an evaluation to quantify the level of impairment. Although the Company has not been able to finalize the quantification of the impairment charges relating to its network equipment and construction-in-progress, the Company estimates the impairment charges for these assets in order to reduce network equipment and construction-in-progress to their fair value and as calculated in accordance with GAAP, to be in the range of $150 to $170 million in the third quarter of 2011.
As previously announced, FiberTower filed a Notification of Late Filing, or Form 12b-25, with the Securities and Exchange Commission with regard to its third quarter 2011 Form 10-Q report. This allowed the Company an additional five calendar days to file the Form 10-Q, which was otherwise due on November 9, 2011, and which expired on November 14, 2011. The Company continues to be unable to file its Form 10-Q for the quarter ended September 30, 2011, as a result of its inability to quantify the impairment charges discussed above.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Faraday Future signs robotics distributor deal, plans partner event
- Getty Realty discloses separation terms for departing accounting officer
- enVVeno Medical (NVNO) files $100M mixed shelf
Create E-mail Alert Related Categories
Corporate News, Guidance, Management ChangesSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
