Globix Mulls Bankruptcy
On December 27, Globix said it was in bankruptcy talks with its bondholders aimed at "significantly reducing the company's debt burden," according to a press release. The informal committee of bondholders represent approximately 48 percent of Globix's outstanding $600 million issuance of 12½ percent senior notes.
Globix said it was in similar discussions with its preferred stockholders.
Since the announcement, shares in Globix have fallen and are trading midday Thursday at about .12. Globix's 52-week range is 8.75 to .03.
Additionally, Globix reported financial results for its fourth quarter and fiscal year ended September 30, 2001. Revenue for the fourth quarter of 2001 was $25.0 million compared to $25.9 million in the prior year quarter. For the fiscal 2001 year, revenue was $104.2 million compared to $81.3 million in the previous year.
During the fourth quarter of fiscal 2001, the company recorded a restructuring charge of $18.0 million related to the estimated termination costs of certain leases, and the write-off of leasehold improvements, excess equipment and employee termination costs.
For the fourth quarter of 2001, net loss attributable to common stockholders was $73.6 million, or $1.89 per share based on 38.9 million common shares. For the fiscal year, net loss attributable to common stockholders was $220.1 million, or $5.72 per share.
Peter Herzig, chief executive officer, said, "We are encouraged by the overall results for the fiscal year and are optimistic that we will be able to reach agreement with our bondholders and preferred stockholders. This past year was a challenging one for our company and our industry in general. The events of September 11, coupled with turbulent market and economic conditions and the dot-com fall out, have affected all participants in our market. We are seeking to greatly reduce our debt burden so that we will have the necessary liquidity to focus on the competitive advantage Globix enjoys as a premium provider of complex hosting services. While I believe these most recent developments, along with the growth and operational accomplishments Globix achieved during this past fiscal year will provide a strong platform for our future, we do not believe we will meet the fiscal 2002 guidance previously provided. In light of ongoing discussions with our bondholders, we expect to provide new guidance when we release our financial results for the first quarter ended December 31, 2001."