Jackson, Miss.-based wireless cable operator Wireless One
Inc. obtained a $36 million loan that will help it to emerge from bankruptcy and finance
its expansion into the high-speed Internet market.
Cerberus Capital Management L.P. agreed to lend Wireless
One the funds, which will be used to pay about $20.5 million in outstanding debt and to
help finance the build-out of its high-speed-data network.
The company said it filed a motion with the U.S. Bankruptcy
Court in the District of Delaware for a hearing to approve the Cerberus loan by the end of
the month.
"The new financing is a key part of the company's
strategy to restructure its balance sheet and to exit bankruptcy a stronger, more viable
company," Wireless One CEO Henry Burkhalter said in a prepared statement.
"The financing gives us the working capital necessary
to further develop our broadband wireless spectrum designed to provide high-speed Internet
access, data transmission and telephony services to commercial accounts and
customers," he added.
Wireless One currently offers wireless video and resells
direct-broadcast satellite services from DirecTV Inc. to about 101,000 customers in an
11-state area in the Southeast.
The company also completed a six-month
voice-over-Internet-protocol field test in April, and it plans to bundle digital voice
services along with data, video and Internet offerings. So far, at least, it hasn't
attracted investments from MCI WorldCom and Sprint Corp., which have been buying wireless
cable spectrum for data and voice services.
Wireless One filed for Chapter 11 bankruptcy-law protection
in February. For the first quarter ended March 31, the company reported revenue of $9.3
million, down from $10.6 million in the same period last year, and a cash-flow deficit of
$1.8 million, compared with negative cash flow of $1.6 million in the 1998 period.
However, the company said, its first-quarter results were a
substantial improvement over its previous quarter, ended Dec. 31, when cash-flow losses
topped $5.5 million.
Wireless One said the improvement was the result of several
recent operational changes, including the consolidation of its 38 local-market offices
into 28 and a 20 percent reduction in its work force.
