The chairman and two board members of US wireless backhaul provider FiberTower have resigned, as the company announced that it had missed an interest payment on its debt.
FiberTower said in a statement that Chairman John Kelly and two directors of the…
The chairman and two board members of US wireless backhaul provider FiberTower have resigned, as the company announced that it had missed an interest payment on its debt.
FiberTower said in a statement that Chairman John Kelly and two directors of the board, Phil Kelley and Randall Hack, had resigned. The resignations are effective immediately.
FiberTower said that the resignations were “not the result of a disagreement with FiberTower on any matter relating to FiberTower’s operations, policies or practices”. No reason was given in the statement as to why they had resigned.
In the same document, FiberTower said that it had chosen not to make a US$1.3m semi-annual interest payment due on 15 November. The payment was linked to its 9% convertible senior secured notes due in 2012.
The company said that the indenture governing these 2012 notes provides that a failure to make such a payment would constitute “an event of default” following a “cure period” lasting 30 days.
It said: “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.”
FiberTower also said that material impairment charges would be required on its network equipment and construction-in-progress, as a result of three factors: early service terminations expected in Q3; its decision to limit investment in its legacy network; and its estimates of future cash flows to be generated by its network, as compared to its carrying value.
FiberTower has not finalised a cost for these impairment charges, but it estimated that they would range between US$150m and US$170m in Q3.
It also estimated that impairment charges related to its FCC licences would range between US$158m and US$170m.
The company said that it would be late in filing its 10-Q form (showing its quarterly results) to the SEC because it was still trying to estimate the cost of the asset impairment charges.
