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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
September 19, 2000
Date of Report (Date of earliest event reported)
Global TeleSystems, 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
On September 19, 2000, Global TeleSystems, Inc. (the "Company")
announced the resignation of H. Brian Thompson, the Company's Chairman and Chief
Executive Officer. Robert J. Amman, the Company's President and Chief Operating
Officer, was elected by the Company's Board of Directors to replace Mr. Thompson
as Chairman and Chief Executive Officer. The Company's press release announcing
such matters is attached hereto as Exhibit 99.1.
In the press release the Company also announced that, based on current
plans, which include a $500 million cash capital program for 2001, in order to
be fully-funded through 2001, the Company will require $250 million of
additional financing over its existing resources and the proceeds of a $550
million multi-currency bank facility (the "Facility") entered into on July 14,
2000 by an indirect subsidiary, Global TeleSystems Europe Holdings B.V. Of the
$550 million under the Facility, $275 million is available currently, of which
the borrower has borrowed 100 million Euros. The remaining $275 million will be
available when certain licenses and rights of way relating to its network have
been transferred to the borrower (collectively, the "Conditions Subsequent").
The Company expects that the Conditions Subsequent will be completed during the
time period required by the lenders under the Facility (nine months from entry
into the Facility in the case of licenses and rights of way in France and the
United Kingdom and six months from entry into the Facility in the case of
licenses and rights of way in other countries), but borrowed funds will have to
be repaid within 90 days of the expiration of these periods if the Conditions
Subsequent are not satisfied.
In addition, the Company expects that the required $250 million in
additional financing could be raised through debt or equity financing (which may
be convertible into the Company's common stock) or through the proceeds of the
sale of its shares of common stock in Golden Telecom, Inc., a 62%-held
subsidiary, which operates in Russia and other countries of the Commonwealth of
Independent States, or its 50% interest in Flag Atlantic Limited, which is
building a transatlantic fiber optic link between Europe and the United States,
or some combination of these alternatives. There can be no assurance that the
Company will be successful in satisfying the Conditions Subsequent or in raising
the additional $250 million. If the Company is not successful, it expects to
evaluate its available strategic options at that time.
The Company has also determined that, in connection with the migration
of certain functions currently based in the United States to Europe, it expects
to dispose of its web hosting center that is under construction in Northern
Virginia. The functions of the hosting center and accompanying network operation
center, which were scheduled to open in the fourth quarter of 2000, will be
conducted in Europe.
This report includes forward-looking statements, which involve risk and
uncertainty. We have based these statements on the Company's current
expectations about future events. These forward-looking statements are subject
to risks, uncertainties and assumptions, including, among other things, our need
for additional financing, the
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condition of the financial markets, political and regulatory considerations, and
the implementation of our business strategy. These forward-looking statements
may differ materially from actual events because they involve estimates,
assumptions and uncertainties.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Designation Description of Exhibit
- ----------- ----------------------
99.1 Press release announcing resignation of H. Brian
Thompson from, and election of Robert J Amman to, the
positions of Chairman and Chief Executive Officer.
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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, Inc.
(Registrant)
/s/ Arnold Y. Dean
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Date: September 20, 2000 Arnold Y. Dean
Vice President, Deputy General
Counsel and Assistant Secretary
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Exhibit Index
Designation Description of Exhibit
- ----------- ----------------------
99.1 Press release announcing resignation of H. Brian
Thompson from, and election of Robert J Amman to, the
positions of Chairman and Chief Executive Officer.