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Excerpts: GT Group Telecom, Form F-1.

  • We used substantial capital to fund our acquisitions of the businesses of Shaw FiberLink and Videon FiberLink, our acquisition of the Cable Atlantic competitive local exchange carrier and commercial telecommunications operations and our acquisitions from 360networks, and will have significant capital expenditures, working capital, debt service and cash flow deficits during the period in which we are expanding our business and deploying our network, services and systems.
  • In February 2000, we acquired the business of Shaw FiberLink for $360 million in cash and the issuance of 27.1% of our fully-diluted equity. We funded the cash portion of our acquisition of the business of Shaw FiberLink by borrowing $100 million under our bank facility and by using $260 million of the net proceeds from the issuance of our units. In April 2000, we acquired the business of Videon FiberLink from Moffat Communications for $68 million in cash and 1,667,000 of our class B non-voting shares. In May 2000, we acquired and will acquire fiber and dedicated fiber optic capacity from 360networks for an initial cash payment of approximately $32 million and total future payments of $328 million. We have options to acquire from 360networks further fiber and dedicated fiber optic capacity. In July 2000, we acquired from Cable Atlantic its competitive local exchange carrier and commercial telecommunications operations for $15 million in cash, 1,740,196 of our class B non-voting shares and a cash payment equal to the value of the net working capital of the acquired business on the closing date. In October 2000, we signed a term sheet with C1 Communications to acquire all of its Atlantic Canada business and assets in exchange for the issuance of 2,372,000 class B non-voting shares and the assumption of certain liabilities. The transaction is subject to obtaining certain approvals.
  • In May 2000, we agreed with 360networks Inc. to (1) lease from them dedicated fiber optic wavelengths and (2) purchase fiber in Canada and receive from them an indefeasible right to use fiber in the United States. The aggregate price of the dedicated fiber optic capacity and fiber we acquired was approximately $362 million. We have the option to acquire from 360networks additional fiber and dedicated fiber optic wavelengths. In addition, we invested approximately $43 million in the equity of 360networks. As at December 31, 2000, we have accepted approximately 76% of the fibre-optic capacity under a long-term lease arrangement for $61 million.
  • Agreements with 360networks, inc.
  • In May 2000, we agreed with 360networks, inc. to (1) lease from them dedicated fiber optic capacity and (2) purchase fiber in Canada and receive from them an indefeasible right to use fiber in the United States. The aggregate price of the dedicated fiber optic capacity and fiber we acquired was approximately $362 million. We have the option to acquire from 360networks additional fiber and dedicated fiber optic capacity.
  • Under the agreement, 360networks will lease to us fiber optic capacity at a bandwidth level of 2.4 gigabits per second, in Canada and the United States. The lease will give us the exclusive right to use this fiber capacity for 20 years, comprised of an initial term of 3 years with a 17 year renewal option at our discretion. As at December 31, 2000, we have accepted approximately 76% of the fiber optic capacity lease.
  • In addition, 360networks has sold and will sell to us 12 strands of unused fiber ranging approximately 7,000 kilometers, connecting Seattle, Washington to Halifax, Nova Scotia via Victoria, Kamloops, Edmonton, Calgary, Regina, Winnipeg, Toronto, Ottawa, Montreal and Quebec City.
  • If we choose, 360networks will also grant us the right to use an additional 12 strands of fiber ranging approximately 7,900 kilometers, connecting Seattle, Sacramento, Denver, Chicago, Detroit, Toronto, Buffalo, Albany, New York City, Boston and Montreal. This fiber will be located primarily in the United States. The indefeasible right to use this fiber will be for a term of at least 20 years.
  • We also will have the option to purchase from 360networks additional segments of fiber optic cable connecting the United States and Canada.
  • Delivery of the capacity and the fiber to us by 360networks and payment by us to 360networks will be made in installments over the next four years. An initial installment payment of approximately $32 million has been made. We will also pay 360networks fees for maintaining the fibers.
  • In addition, we invested approximately $43 million in the equity of 360networks.
  • Leo J. Hindery, Jr. Mr. Hindery has been a director since March 23, 2000. Mr. Hindery is currently chairman and chief executive officer of GlobalCenter Inc., the Internet commerce services subsidiary of Global Crossing (from March 2000 until October 2000, he was also, on an interim basis, chief executive officer of Global Crossing Ltd.). Prior to joining Global Crossing and GlobalCenter, Mr. Hindery was president and chief executive officer of AT&T Broadband & Internet Services and president and chief executive officer of its predecessor company, Tele-Communications, Inc. (TCI). From 1988 to 1997, Mr. Hindery was the founder and managing general partner of InterMedia Partners, the ninth largest multiple cable system operator in the United States. Prior to this, Mr. Hindery was chief officer for planning and finance of The Chronicle Publishing Company, and chief financial officer and managing director of Becker Paribas, Inc. Mr. Hindery holds an MBA from Stanford University and an honors degree from Seattle University and is a member of the Stanford Business School Advisory Council. He is a director of Tanning Technology Corp., TD Waterhouse Group, Inc. Telocity, Inc. and Vertical Net, Inc.

Source: GT Group Telecom Inc.