XO Communications Inc. has completed a private placement of 6 percent Class A Convertible Preferred Stock and has received total proceeds of $200 million. The company privately offered the shares of preferred stock to XO stockholders that currently hold an aggregate of approximately 85 percent of XO's outstanding common stock.
Affiliates of Carl C. Icahn, XO's chairman and owner of approximately 50 percent of XO's outstanding common stock, purchased $190 million of the preferred stock, and an affiliate of Amalgamated Gadget, L.P., holder of approximately 9.4 percent of XO's outstanding common stock, purchased an additional $10 million.
"This agreement demonstrates continued support for XO's ability to execute in the market and our goal of achieving free cash flow positive," says Carl Grivner, XO Communications' CEO. "The proceeds will be used for our ongoing operations, continued investments in new customer solutions like voice over-IP services and potential acquisitions that would provide our business with additional scale and cost synergies."
Each share of preferred stock is initially convertible at $4.62 per share into 10.82251 shares of XO common stock. XO's common stock closed on Aug. 5, 2004 at a trading price of $3.62 per share.
