However, the additional $200 million is subject to consent from 10% of Metromedia Fiber's senior notes holders, who have until Aug. 31 to offer or deny consent. The $235 million will be granted once the company closes the $150 million note facility led by Citicorp USA and gets a commitment from affiliates for a total of $230 million. The company has already secured $180 million of the $230 million.
Metromedia Fiber is facing lawsuits from shareholders who allege the company has been less than forthcoming about revealing the strings attached to its financing. At least eight law firms, including Schiffrin & Barroway of Bala Cynwyd, Pa., and Stull, Stull & Brody of New York, represent plaintiffs who bought Metromedia Fiber stock between Jan. 8, 2001 and July 2, 2001. The class-action lawsuits claim that Metromedia Fiber did not inform shareholders that the $350 million in financing it was to receive from Citicorp is contingent upon the company's ability to secure funding from other lenders.
Because shareholders were allegedly misled to believe the company had enough money to finish building its fiber optics network, Metromedia Fiber's stock price rose to a high of $19.06 on Jan. 19. The stock price later fell to $1.95 on July 2 when the company informed the public that its receipt of financing from Citicorp was contingent on receipt of financing from other sources, which it had not yet secured.
Neither Metromedia Fiber nor attorneys involved with the lawsuits would comment on the situation. At 3:00 p.m. Thursday, the company's stock was trading around 70 cents, which is higher than the new 52-week low of 49 cents, set on July 30.