WEST POINT, Ga.-InterCel Inc. said it will let the bond market settle down before it offers a new issue of $300 million of Senior Notes due 2007.
InterCel announced March 17 it would offer the notes, then five days later temporarily postponed that activity due to “continuing volatile bond market conditions.”
“We are fortunate that the timing of capital raising is not critical to our operations at this stage,” said Allen E. Smith, InterCel’s president and chief executive officer.
InterCel said its cash reserves as of Dec. 31 were about $260 million; The company expects gross proceeds of more than $77 million from the sale of its Maine cellular properties.
“At present, we are comfortably funded and project that we will be able to complete the initial buildout of our current [personal communications services] properties and to continue operations in accordance with our existing business plan without modification of additional capital,” Smith said.
InterCel did, however, close two sales into escrow: 50,000 shares of Series C Convertible Preferred Stock for $22.5 million in cash to The Huff Alternative Income Fund L.P., and 50,000 shares of Series D convertible Preferred Stock for $22.5 million in cash to Scana Communications Inc.
The funds will be released from escrow once the sale of the notes is closed, providing the closing occurs on or before April 30, InterCel said.
InterCel plans to use proceeds from the sale of the senior notes and the Series C and D stock to pay for the 10-megahertz PCS licenses InterCel won at auction in January, to finance certain development, construction and operating costs associated with InterCel’s PCS networks, and to finance the first six interest payments on the notes.
InterCel offers 1900 MHz PCS service under the Powertel brand name in Tennessee, Alabama, Georgia and Florida. It also operates cellular service in western Georgia and eastern Alabama.
