Pac-West Telecomm, Inc. Announces Exit From Certain Markets
25 Juli 2007 - 12:24AM
PR Newswire (US)
-- Company to reorganize around operations in the Western US,
including California and Washington State STOCKTON, Calif., July 24
/PRNewswire-FirstCall/ -- Pac-West Telecomm, Inc. (OTC:PACW.PK), a
wholesale provider of advanced telecommunications services,
announced today that it has notified affected customers that it
intends to cease operations in 24 states and the District of
Columbia. This action will allow Pac-West to reorganize around its
remaining operations in the Western US, including its significant
market positions in California and other western states. The
markets to be exited are: Pac-West West Exited Markets Alabama
Illinois Michigan New Jersey South Carolina Delaware Indiana
Minnesota New York Tennessee District of Columbia Kansas
Mississippi Ohio Texas Florida Kentucky Missouri Pennsylvania
Virginia Georgia Maryland North Carolina Rhode Island Wisconsin The
Company will shortly file an application with the United States
Bankruptcy Court for the District of Delaware for approval of this
action and to terminate certain of the Company's contractual
obligations in the exited markets. Wallace W. Griffin, Pac-West's
Chairman of the Board, President and Chief Executive Officer, noted
that this action is a key first step toward the Company's
reorganization and emergence from Chapter 11 as a financially-
revitalized telecommunications competitor serving the growing needs
of its Western US customer base. He said, "Our business in the
exited markets was in an early stage of development and was
operating at a substantial loss. Pac- West determined that it could
not support the costs associated with the relatively small revenue
and customer base. It has also become clear to us that the
continued availability of financing for operations in those markets
is not assured, which would jeopardize our ability to continue to
provide uninterrupted service in those markets during the Chapter
11 proceedings. We have therefore concluded that discontinuing
services in the exited markets is essential to Pac-West's being
able to reorganize under Chapter 11, and that we should do so by
giving our customers in those markets as much notice as we can in
light of our circumstances. This action is expected to place
Pac-West back on the road to profitability. Our priority will now
turn to reorganizing around our remaining operations in the Western
US." On April 30, 2007, Pac-West and its subsidiaries filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code in the District of Delaware. Since then, Pac-West has been
operating as a debtor-in-possession. On June 7, Pac-West obtained
approval for a debtor-in-possession loan facility from Pac-West
Funding Company LLC, an affiliate of Columbia Ventures Corporation,
an existing investor in Pac-West. Mr. Griffin noted that Pac-West's
financial performance continues to be in line with the projections
submitted to the DIP lender and to the Bankruptcy Court and that
the Company's reorganization activities continue to be on track for
an exit late in 2007. About Pac-West Telecomm, Inc. Pac-West is a
provider of advanced communications services that enable
traditional and next-generation providers, carriers, and service
providers to efficiently design, deploy, and deliver integrated
communication solutions. Founded in 1980, Pac-West Telecomm, Inc.
has been offering communication services to its customers since
1982 and has been a leading provider of wholesale services to
Internet Service Providers. For more information about Pac-West and
its reorganization, visit http://www.pacwest.com/. Forward Looking
Statements In this report, our use of the words "outlook,"
"expect," "anticipate," "estimate," "forecast," "project,"
"likely," "objective," "plan," "designed," "goal," "target," and
similar expressions is intended to identify forward- looking
statements. While these statements represent our current judgment
on what the future may hold, and we believe these judgments are
reasonable, actual results may differ materially due to numerous
important risk factors, including risk factors described in our
Annual Report on Form 10-K for the period ended December 31, 2005,
as filed with the SEC on March 29, 2006, as revised and
supplemented by the risk factors described in our Quarterly Reports
on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006
and September 30, 2006, as filed with the SEC on May 12, 2006,
August 11, 2006 and November 20, 2006 respectively, and which may
be further revised or supplemented in subsequent reports filed by
us with the SEC. Such risk factors include, but are not limited to
risks associated with: our ability to successfully reorganize under
Chapter 11 of the U.S. Bankruptcy Code; our ability to comply with
the covenants contained in, or the possibility of triggering a
default under, our DIP financing facility; our ability to execute
our business plans and objectives; our ability to retain customers,
suppliers; vendors, partners and employees during our
reorganization; regulatory and legal uncertainty with respect to
intercarrier compensation payments received by us; the migration to
broadband Internet access affecting dial-up Internet access; an
increase in our network expenses; our principal competitors for
local services and potential additional competitors, which may have
advantages that may adversely affect our ability to compete with
them. DATASOURCE: Pac-West Telecomm, Inc. CONTACT: Millie Virgil of
Pac-West, +1-209-926-3490 Web site: http://www.pacwest.com/
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