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Exhibit 99.1
WORLD ACCESS ENGAGES UBS WARBURG TO EXPLORE RESTRUCTURING ALTERNATIVES
Atlanta, Georgia - March 27, 2001 - WORLD ACCESS, INC. (NASDAQ: WAXS) announced
today that it has retained UBS Warburg to explore alternatives to restructure
the Company's debt obligations and identify additional sources of capital.
On February 15, 2001, World Access announced that management believed fourth
quarter 2000 results would be worse than previous expectations and guidance,
and that, as a result, the Company was pursuing a financial restructuring,
which included a tentative agreement with holders of its 13.25% Senior Notes
("the Notes") to restructure that obligation, as well as a new credit line and
a tentative agreement with a vendor to restructure a current trade obligation.
While the Company has not yet finalized its fourth quarter and year-end 2000
financial results, management confirms that revenues for the quarter were
approximately 15% below its original guidance, and advises that the Company
incurred significant EBITDA and Net Earnings losses. Operating Losses resulted
principally from the revenue shortfall, gross margins that were significantly
lower than planned and additional bad debt reserves. Net earnings were also
impacted by a significant goodwill write-down and a loss on the Company's
investment in BATM Advanced Communications Ltd. (London Stock Exchange: BVC).
As a consequence of the preliminary results for the fourth quarter, management
has revised its operating forecast, and now believes that available cash is
insufficient to both fund the revised agreement with the holders of the Notes
and provide sufficient cash for operations. In light of this information, the
Company is seeking a financial restructuring of significantly greater
proportions than that announced in the Company's press release dated February
15, 2001.
John D. Phillips, Chairman and Chief Executive Officer, said, "The Company
currently has cash and investments of approximately $100 million to continue to
fund operating requirements pending any restructuring. Obviously, the
telecommunications industry is struggling through difficult times, particularly
in relation to the availability of capital. While this has created a liquidity
crisis for us and many of our peers, we continue to believe that our strategy
of consolidating a significant base of small and medium sized commercial
customers in Europe is sound. We have made significant progress in the
implementation of our strategy, and if our financial restructuring is
successful, we expect to carry forward our strategic goals. In addition, we
have initiated a broad review of our operations with the objective of focusing
on earnings rather than our historical focus on growth. We expect that this
review will result in an operational restructuring to consolidate or downsize
certain operations that have not yet achieved sufficient scale."
UBS Warburg is expected to initiate further discussions with the holders of the
Notes, evaluate the restructuring of other obligations, and seek sources of new
private equity capital. While management believes that a significant
restructuring is possible and in the best interest of World Access shareholders
and creditors, there can be no assurance of a successful restructuring. If
World Access is not able to restructure existing obligations and attract new
capital, the Company may find it necessary to seek protection under Chapter 11
of the U.S. Bankruptcy Code.
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After the expiration of the rescission period offered to the shareholders of
TelDaFax AG (NEUER MARKT:TFX) in connection with the Company's tender offer for
all of the outstanding shares of TelDaFax, the number of TelDaFax shares
tendered and not withdrawn or rescinded gives World Access a potential
ownership stake in TelDaFax of 70.11%. However, the share exchange has not been
completed, and the Company will release additional information regarding the
TelDaFax share exchange after consultation with the relevant authorities and
the Company's advisors.
About World Access
World Access is focused on being a leading provider of bundled voice, data and
Internet services to small- to medium-sized business customers located
throughout Europe. In order to accelerate its progress toward a leadership
position in Europe, World Access is acting as a consolidator for the highly
fragmented retail telecom services market, with the objective of amassing a
substantial and fully integrated business customer base. To date, the Company
has acquired several strategic assets, including Facilicom International, which
operates a Pan-European long distance network and carries traffic for carrier
customers, NETnet, with retail sales operations in 9 European countries, and
WorldxChange, with retail accounts in the US and Europe. World Access, branding
as NETnet, offers services throughout Europe, including long distance, internet
access and mobile services. The Company provides end-to-end international
communication services over an advanced asynchronous transfer mode internal
network that includes gateway and tandem switches, an extensive fiber network
encompassing tens of millions of circuit miles and satellite facilities. For
additional information regarding World Access, please refer to the Company's
website at www.waxs.com.
This press release may contain financial projections or other forward-looking
statements made pursuant to the safe harbor provisions of the Securities Reform
Act of 1995. Such statements involve risks and uncertainties which may cause
actual results to differ materially. These risks include: inability to obtain
adequate financing or financing on terms acceptable or favorable to the
Company; inability to restructure existing debt obligations; potential
inability to identify, complete and integrate acquisitions; difficulties in
expanding into new business activities; delays in new service offerings; the
potential termination of certain service agreements or the inability to enter
into additional service agreements; and other risks described in the Company's
SEC filings, including the Company's Annual Report on Form 10-K for the year
ended December 31, 1999, as amended, the Company's Quarterly Reports on Form
10-Q for the quarters ended March 31, 2000 and June 30, 2000, as amended, the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
2000, and the Company's Registration Statements on Forms S-3 (No. 333-79097)
and S-4 (No. 333-37750 and 333-44864), and the Company's Report on Form 8-K
dated February 21, 2001, all of which risks are incorporated by reference into
this press release.
World Access has filed a proxy statement/prospectus and other relevant
documents concerning the TelDaFax transactions with the SEC. WE URGE INVESTORS
TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain the documents free of charge at the SEC's Web
site, www.sec.gov <http://www.sec.gov>. In addition, documents filed with the
SEC by World Access will be available free of charge by writing to Investor
Relations, World Access, Inc., 945 E. Paces Ferry Road, Suite 2200, Atlanta,
GA, 30326, or by telephone request to 404-231-2025.
The participants, as defined in Instruction 3 to Item 4 of Schedule 14(A) in
the solicitation of proxies from the World Access stockholders for the
approval of the transactions include World Access and Walter J. Burmeister,
Kirby J. Campbell, Brian Cipoletti, Stephen J. Clearman, John P. Imlay, Jr.,
Massimo Prelz Oltramonti, John D. Phillips, John P. Rigas, Carl E. Sanders
and Lawrence C. Tucker, each a director of World Access. Please see World
Access' Registration Statement on Form S-4 (No. 333-44864) for a description
of the World Access security holdings of each of the World Access directors.
World Access Contact: Michele Wolf
(404-231-2025) V.P. of Investor Relations
http://www.waxs.com