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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 7, 1999
Date of Report (Date of earliest event reported)
Global TeleSystems Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-23717 94-3068423
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4121 Wilson Boulevard
8th Floor
Arlington, VA 22203 22203
(Address of principal executive offices) (Zip Code)
(703) 236-3100
(Registrant's telephone number, including area code)
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Item 5. Other Events
Global TeleSystems Group, Inc. ("GTS") owns indirectly fifty percent of
FLAG Atlantic Limited, a Bermuda corporation ("FLAG Atlantic"), which was formed
to develop, construct, operate, and arrange the financing for an approximately
15,000 kilometer, six fiber pair, submarine fiber optic cable system which will
connect the United States and Europe, and together with the landed portions of
the systems, will connect London, Paris and New York. FLAG Atlantic Holdings
Limited is the indirect owner of the other fifty percent of FLAG Atlantic. The
project will have an initial available capacity of 160 gigabits per second that
will be upgraded with wave division multiplexing technology to a total system
capacity of 2.4 terabits per second. We anticipate that the first leg and second
leg of the system will be available for commercial operation on or about the
first quarter of 2001 and second quarter of 2001, respectively. Total project
costs are estimated at $1.2 billion, which will be funded by (A) $100 million in
equity investments by each of GTS and FLAG Telecom (to be made no later than
October 21, 2000), (B) approximately $400 million in commitments by GTS and its
affiliate, GTS Network (Ireland) Limited, FLAG Telecom and third parties to
purchase capacity on the system and (C) a $600 million bank credit facility. The
GTS commitments with respect to its equity investment and capacity purchase are
supported by a letter of credit. The bank credit facility closed on October 8,
1999; however, no more than $190 million is available for borrowing by FLAG
Atlantic thereunder until certain additional capacity purchases have been
committed and landing licenses for the system have been obtained.
The bank credit facility is non-recourse to GTS and FLAG; however, in
addition to other collateral and assignment of certain contracts, GTS and FLAG
have pledged all of the shares of stock they own in FLAG Atlantic to the lenders
in the bank credit facility.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Designation Description of Exhibit
99.1 The Further Restated Shareholders Agreement, dated October 7, 1999
between FLAG Atlantic Holdings Limited and GTS Transatlantic
Holdings, Ltd.(1)
99.2 Bank Credit Agreement, dated as of October 8, 1999, among FLAG
Atlantic Limited, Barclays Capital, Westdeutsche Landesbank
Girozentrale, New York Branch, Dresdner Bank AG,
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(1) Portions of this Exhibit denoted by the symbol [*******] are subject to a
request for confidential treatment filed by GTS with the Securities and Exchange
Commission.
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New York Branch, Barclays Bank Plc and the Lenders listed
therein.(1)
99.3 Shareholder Pledge Agreement, dated as of October 8, 1999, among
GTS Transatlantic Holdings, Ltd., FLAG Atlantic Holdings Limited
and Barclays Bank Plc.
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(1) Portions of this Exhibit denoted by the symbol [*******] are subject to a
request for confidential treatment filed by GTS with the Securities and Exchange
Commission.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Global TeleSystems Group, Inc.
(Registrant)
/s/ Arnold Y. Dean
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Date: January 28, 2000 Arnold Y. Dean
Vice President, Deputy General
Counsel and Assistant Secretary
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EXHIBIT INDEX
DESIGNATION DESCRIPTION OF EXHIBIT
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99.1 The Further Restated Shareholders Agreement, dated October 7,
1999 between FLAG Atlantic Holdings Limited and GTS
Transatlantic Holdings, Ltd.(1)
99.2 Bank Credit Agreement, dated as of October 8, 1999, among
FLAG Atlantic Limited, Barclays Capital, Westdeutsche
Landesbank Girozentrale, New York Branch, Dresdner Bank AG,
New York Branch, Barclays Bank Plc and the Lenders listed
therein.(1)
99.3 Shareholder Pledge Agreement, dated as of October 8, 1999,
among GTS Transatlantic Holdings, Ltd., FLAG Atlantic
Holdings Limited and Barclays Bank Plc.
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(1) Portions of this Exhibit denoted by the symbol [*******] are subject to a
request for confidential treatment filed by GTS with the Securities and Exchange
Commission.