Qwest Communications International Inc. said Wednesday it reached an agreement with 29 lenders to amend its $3.4 billion bank facility, adding the company also completed a $750 million loan at its phone directory business, QwestDex.
In an agreement that gives the carrier some breathing room, the Denver-based company has extended the maturity of its bank facility two years from May 2003 to May 2005.
Qwest also disclosed reaching an agreement with its lenders to ease its financial covenants, which is a key step in averting possible covenant violations that can ultimately lead to a bankruptcy filing. The company said it must meet a debt to consolidated EBITDA ratio of six, rather than four, after this year.
“Coupled with the pending sale of QwestDex, these actions announced today and the cash flow from our operations should provide us with enough funding for the next several years, and put any liquidity concerns behind us,” said Oren Shaffer, Qwest’s vice chairman and CFO, in a press release Wednesday.
Qwest announced last month reaching an agreement to sell its publishing directory business for $7.05 billion to The Carlyle Group and Welsh, Carson, Anderson & Stowe. Qwest plans to sell QwestDex in two stages with the first sale closing at $2.75 billion at the end of the fourth quarter followed by a $4.3 billion sale closing next year.
Qwest said Wednesday it must use a portion of the money from the sale of the first phase of QwestDex to pay down its bank facility to $2 billion, and subsequently pare down its loan to $1.25 billion following the close of the second phase of the sale.
