EXHIBIT 99
News Release
CONTACTS:
FOR DIGITAL TELEPORT
Sal Cinquegrani
1-847-359-2808 (o)
1-888-761-1313 (p)
DIGITAL TELEPORT FILES VOLUNTARY REORGANIZATION; OBTAINS $5 MILLION
FINANCING
ST. LOUIS - (Dec. 31, 2001) - Digital Teleport Inc. and its holding company, DTI
Holdings Inc., today is filing voluntary petitions for Chapter 11 reorganization
with the U. S. Bankruptcy Court for the Eastern District of Missouri. The
company also announced it has received a commitment for up to $5 million in
debtor-in-possession financing to fund continuing operations during its
court-supervised restructuring.
After reviewing various and previously disclosed strategic alternatives, the
regional fiber communications provider for secondary and tertiary markets
concluded that Chapter 11 reorganization offers the most attractive opportunity
for success. KLT Telecom Inc., a non-regulated subsidiary of Great Plains Energy
Inc. (NYSE:GXP), and current majority owner of the company, is providing the DIP
financing.
Through this restructuring, Digital Teleport expects to eliminate about $300
million in debt and significantly reduce other future commitments. Digital
Teleport will use the debtor-in-possession financing plus cash from operations
to fund post-filing operating expenses and obligations to suppliers and
employees.
"During telecom's peak growth years, Digital Teleport pursued an aggressive
national expansion at the cost of profitability," said Paul Pierron, president
and CEO of Digital Teleport. "We borrowed heavily to acquire fiber network
routes that were never put into service. Payments on our bond debt were set to
begin in September 2003 and create extraordinary financial pressure."
Digital Teleport expects to emerge from reorganization as a stronger, more
flexible company with a unique network, a manageable debt load, and a growing
base of recurring monthly revenue. Excluding one-time legal and financial
expenses associated with its voluntary restructuring, Digital Teleport expects
to report positive operating cash flow for January 2002.
The company plans to exit the national long-haul business and eliminate
non-revenue producing fiber routes. Digital Teleport will focus on operating its
traditional core fiber optic network that spans a five-state region in the
Midwest.
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Digital Teleport
Dec. 31, 2001
"During the restructuring, the company will continue to be focused on providing
the highest quality service to our existing bandwidth customers and fulfilling
post-petition obligations to customers, suppliers and employees," Pierron said.
"Digital Teleport is not going out of business. We are not liquidating.
Reorganization under Chapter 11 enables Digital Teleport to strengthen our
balance sheet, eliminating unneeded network facilities, maintaining positive
cash flows, ensuring sufficient cash to continue operating and growing the
business," Pierron said.
Earlier this year, KLT Telecom took a controlling ownership interest in Digital
Teleport. At that time, more emphasis was shifted to revenue generation and a
new team led by Pierron was brought in. As a result, year-to-date revenues
through last Sept. 30, the last reported period, are up 68 percent compared to
the same period a year ago, despite the economic and telecom downturn.
ABOUT DIGITAL TELEPORT
Digital Teleport provides wholesale fiberoptic transport services in secondary
and tertiary markets to national and regional communications carriers. The
company also provides Ethernet service to enterprise customers and government
agencies in office buildings in areas adjacent to the company's metropolitan
network rings. Formed in June 1989, Digital Teleport is 83.4 percent owned by
Great Plains Energy Inc. Year-to-date through Sept. 30, 2001 Digital Teleport
reported total revenues of $13 million. The company's Web site is
WWW.DIGITALTELEPORT.COM.
FORWARD LOOKING STATEMENTS
This news release contains projections or other forward-looking statements
regarding future events, outcomes, growth projections or the future financial
performance of Digital Teleport. These statements are only predictions. Actual
events or results may differ materially from these forward-looking statements.
Digital Teleport's Chapter 11 petitions and all other documents filed with the
bankruptcy court contain and identify important factors that could cause the
actual results to differ materially from those contained in our projections or
forward-looking statements. All actions contemplated by Digital Teleport are
subject to bankruptcy court approval.
END