Exhibit 99.1
Mpower to Reshape Company through Strategic and Financial Transactions
ROCHESTER, NY - January 8, 2003 - Mpower Communications Corp. (NASD OTC: MPOW),
a provider of integrated data and voice services to business customers, today
announced several strategic and financial transactions which should further
strengthen the company financially and focus its operations on its California,
Nevada and Illinois markets.
Mpower has reached an agreement with RFC Capital Corporation, a wholly owned
subsidiary of Textron Financial Corporation, for a three-year funding facility
of up to $7.5 million, secured by certain of the company's receivables. Mpower
anticipates closing this facility by January 31, 2003. This new funding is
expected to provide near-term liquidity for Mpower as it continues to
restructure its operations. The company indicated that it is also in active
discussions with additional potential investors.
Mpower is bringing geographic concentration to its business by
transitioning its customers and assets in Florida, Georgia, Ohio, Michigan and
Texas to other service providers. Each of these transactions is expected to
result in cash infusions to Mpower and significant reductions to the company's
cost structure. Importantly, these transactions are expected to provide
uninterrupted service for customers transitioning from Mpower and job
opportunities for the company's employees in these markets.
o Mpower has reached an agreement for its Southeast markets, and will
transition its customers in Atlanta, Ft. Lauderdale, West Palm Beach, Miami
and Tampa to Orlando-based Florida Digital Network Inc., a full-service
integrated communications provider.
o Mpower has also reached an agreement for its Texas markets, and will
transition its customers in Dallas/Ft. Worth, Houston, Austin and San
Antonio to Xspedius Equipment Leasing, an affiliate of Xspedius
Communications, a competitive communications carrier headquartered in St.
Louis.
o Finally, Mpower also reached an agreement for its Michigan and Ohio
markets, and will transition its customers in Detroit, Cleveland and
Columbus to LDMI Telecommunications, an integrated communications provider
serving primarily business customers in the Great Lakes region.
Twelve months ago, Mpower set out on a path to strengthen its balance sheet. In
July of 2002, Mpower completed a financial recapitalization that retired
approximately $600 million in long-term debt and preferred stock. As of January
3, 2003, the company's remaining $50 million in long-term debt was also retired.
Coupled with the transactions announced today, the resulting new cash, reduced
operational cost structure and new financing are expected to significantly
improve Mpower's long-term viability.
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"Over the past year we believe we have executed on our vision and have
strengthened the company from both a financial and an operational perspective,"
stated Mpower Communications Chairman and Chief Executive Officer Rolla P. Huff.
"In an industry burdened
by debt-laden telecommunications companies, Mpower stands apart from the crowd
as a company completely free of long-term debt."
"The new Mpower will have geographic focus across 12 markets in California,
Nevada and Illinois with more financial and operational strength, scale and
agility," added Huff. "While our company will now be focused exclusively on
serving and growing our base of 75,000 customers in these three states, we are
extremely pleased that these agreements will provide ongoing communications
services for Mpower customers in every market and new opportunities for many of
the valued employees who will be leaving the company."
About Mpower Holding Corporation
Mpower Holding Corporation (NASD OTC: MPOW) is the parent company of Mpower
Communications, a facilities-based broadband communications provider offering a
full range of data, telephony, Internet access and Web hosting services for
small and medium-size business customers. Further information about the company
can be found at www.mpowercom.com.
Forward-Looking Statements
Under the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995, Mpower Holding Corporation cautions investors that certain statements
contained in this press release that state management's intentions, hopes,
beliefs, expectations or predictions of the future are forward-looking
statements. Management wishes to caution the reader these forward-looking
statements are not historical facts and are only estimates or predictions.
Actual results may differ materially from those projected as a result of risks
and uncertainties including, but not limited to, the expected financial and
operational improvements from the transactions described herein, market makers
independent decisions to create a market in the common stock of the company,
future sales growth, market acceptance of our product offerings, our ability to
secure adequate financing or equity capital to fund our operations, network
expansion, our ability to manage rapid growth and maintain a high level of
customer service, the performance of our network and equipment, our ability to
enter into strategic alliances or transactions, the cooperation of incumbent
local exchange carriers in provisioning lines and interconnecting our equipment,
regulatory approval processes, changes in technology, price competition and
other market conditions and risks detailed from time to time in our Securities
and Exchange Commission filings. The company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of future events,
new information, or otherwise.
Contacts
Investor Relations Inquiries: Media Inquiries:
Gregg Clevenger Michele Sadwick
Chief Financial Officer Vice President
(585) 218-6547 (585) 218-6542
invest@mpowercom.com msadwick@mpowercom.com
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