Exhibit 99.1
------------
FOR IMMEDIATE RELEASE Contact: Becky Haight
Investor Relations
Pathnet
877 227-5600
investor@pathnet.net
Kye Presley-Dowd
Media Relations
Pathnet
202 295-3286
media@pathnet.net
PATHNET ANNOUNCES AGREEMENTS FOR STRATEGIC INVESTMENTS FROM
COLONIAL PIPELINE,BNSF AND CSX
Pathnet to Receive Cash and Access to 12,000 Miles of Rights-of-Way
WASHINGTON, DC, NOVEMBER 9, 1999 - Pathnet today announced that it has entered
into agreements providing for strategic investments from Colonial Pipeline
Company, Burlington Northern Santa Fe Corporation (BNSF) and CSX Corporation,
valued at $250 million. As part of these agreements, Pathnet will receive the
right to develop over 12,000 miles of the investors' rights-of-way holdings.
Each of the companies is contributing various levels of rights-of-way at values
based on the routes. In addition to providing a portion of the rights-of-way
access, Colonial Pipeline will also make a $63 million cash investment in
Pathnet. The new investors collectively will receive an approximate one-third
equity stake in Pathnet, as well as proportionate representation on the Pathnet
Board of Directors. Pathnet expects to close the transaction immediately
following receipt of regulatory and other required approvals.
"There can be no stronger endorsement of Pathnet's business strategy and its
overall value proposition than to have industry leaders like Colonial Pipeline,
BNSF and CSX elect to invest in Pathnet," said Dick Jalkut, Pathnet president
and chief executive officer. "The right to select from our new partners'
extensive rights-of-way facilitates our strategy of reaching under-served and
second- and third-tier markets through unique network corridors while enhancing
our `smart build' approach," he added.
As a carrier's carrier, Pathnet is a leader in bridging the "Digital Divide" by
building digital networks enabling competitive telephony service in areas where
a choice - or even current access - may be limited. This strategic relationship
gives Pathnet, which has plans to connect over 230 second- and third-tier
markets to larger tier-one markets, an extensive right-of-way inventory with no
cash outlay. Significant portions of these development rights are exclusive.
Pathnet will also gain access to the specialized skills of the largest of its
new investors, Colonial Pipeline, such as
operations, engineering and legal resources to accelerate the execution of its
strategy of developing a nationwide network.
"Colonial chose to invest in Pathnet after an exhaustive search of other
telecommunication companies' business plans," said David Lemmon, chief executive
officer of Colonial. "Pathnet's unique focus meshes perfectly with Colonial's
vision of extending into the telecommunications business."
"BNSF's decision to make right-of-way available in exchange for an equity
position in Pathnet is indicative of our confidence in the management team Dick
Jalkut has assembled at Pathnet," said Robert D. Krebs, chairman and chief
executive officer of BNSF.
"CSX views this deal as an excellent opportunity to leverage the value of its
rail network. We are impressed with Pathnet's capabilities and look forward to
working closely with them to realize the outstanding future benefits of this
project." said John W. Snow chairman and chief executive officer of CSX.
About Colonial Pipeline Company
Colonial Pipeline Company, headquartered in Atlanta, Georgia operates the
world's largest refined products pipeline, delivering a daily average of 80
million gallons of gasolines, kerosenes, home heating oils, diesel fuels and
national defense fuels to shipper terminals in 12 states and the District of
Columbia. Colonial's 5,349 mile pipeline system transports fuels from Texas,
Louisiana, Mississippi and Alabama to 267 marketing terminals located near the
major population centers throughout the Southeast and along the Eastern
Seaboard. In addition, Colonial provides a portfolio of information and
logistics management services to its customers.
About Burlington Northern Santa Fe Corporation
Through its subsidiary, The Burlington Northern and Santa Fe Railway Company,
BNSF (NYSE: BNI), headquartered in Fort Worth, Texas, operates one of the
largest rail networks in North America, with 34,000 route miles of track
covering 28 states and two Canadian provinces.
About CSX Corporation
CSX Corporation (NYSE: CSX), based in Richmond, Virginia, operates the largest
rail network in the Eastern United States and also provides intermodal,
container shipping and terminal services and contract logistics services.
About Pathnet
Pathnet is a carriers' carrier providing high capacity, digital bandwidth and
access services to under-served and second- and third-tier U.S. markets. It
provides service to inter-exchange carriers, local exchange carriers, Internet
service providers, Regional Bell Operating Companies, cellular operators and
resellers. Pathnet currently has 6,100 route miles of completed network and
1,400 route miles of network under construction. The company's headquarters are
located in
Washington, D.C., at 1015 31st Street, NW, Washington, D.C., 20007. For
additional information about Pathnet, visit the company Web site at
www.pathnet.net.
The statements made by Pathnet in this press release may be forward-looking in
nature. No assurance can be given that future results will be achieved; actual
results may differ materially from those projected in forward looking
statements. Pathnet believes that its primary risk factors include, but are not
limited to: signing additional agreements with private network operators and
others; offering services to telecommunication service providers; entering into
partnering arrangements; and building a digital network. Additional information
concerning these and other potential important factors can be found within
Pathnet's public filings with the U.S. Securities and Exchange Commission.
Statements in this release should be evaluated in light of these important
factors.
###