Metromedia Fiber Gets Conditional Funding - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

Metromedia Fiber Gets Conditional Funding

The optical-networking company finds strings attached to $235 million in vendor financing.

Metromedia Fiber Network Inc. has acquired a conditional $235 million in vendor financing. The optical-networking company is awaiting consent from senior bondholders to secure an additional $200 million.

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.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
News
How GIS Data Can Help Fix Vaccine Distribution
Jessica Davis, Senior Editor, Enterprise Apps,  2/17/2021
Commentary
Graph-Based AI Enters the Enterprise Mainstream
James Kobielus, Tech Analyst, Consultant and Author,  2/16/2021
Slideshows
11 Ways DevOps Is Evolving
Lisa Morgan, Freelance Writer,  2/18/2021
Register for InformationWeek Newsletters
Video
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll