WESTBOROUGH, Mass.-Arch Communications Group Inc. earlier this month announced the termination of its previously disclosed definitive agreement to sell its site-management business to Telecom Towers L.L.C. of Arlington, Va. Arch said it plans to begin discussions with alternative buyers soon.
Moody’s Investors Service placed Arch’s B3 senior unsecured debt rating under review for possible downgrade just days after Arch announced the further delays in expected, although very modest, proceeds from the sale of the site-management business, affecting approximately $692 million in long-term debt securities, said Moody’s.
Arch is more hopeful, though, expecting to report record high levels of net revenues, operating cash flow and total subscriber paging units for the fourth quarter and year when it formally releases results this week. In preliminary operating results, Arch reported net revenues for the fourth quarter ended Dec. 31, increased to $94.1 million, compared with $86.6 million reported in the year-earlier quarter.
Arch also expects to report 109,000 net new subscriber paging units for the quarter, bringing total units in service at year-end to 3.89 million-up 18 percent from the end of 1996, according to the company.
Moody’s is concerned about whether Arch’s cash flow can keep up with its heavy debt burden as the company attempts to expand its paging subscriber base, fund future capital expenditure requirements and meet near-term fixed charge obligations, prompting the review, Moody’s said.
