Lower than expected operating results have sunk Arch Wireless Inc.’s plans to restructure its outstanding debt. A wireless Internet messaging and mobile information provider, Arch withdrew its previously announced proposal to restructure outstanding debt and improve its liquidity through an exchange offer with its lenders.
“Given the lower than expected operating results and their impact on year-end liquidity, the proposed restructuring is not feasible,” said C. Edward Baker Jr., Arch’s chairman & CEO.
Arch cited lower than expected operating results during the quarter ended June 30 as the reason for the withdrawal of the proposal. The company said unexpected customer losses and bad debt expense associated with Paging Network Inc., which Arch acquired last November, was the primary reason for the lower than expected operating results.
Arch said it expects to report a decline of 936,000 one-way units for the second quarter that will negatively affect projected revenue and liquidity through the remainder of 2001. The company said it expects to report two-way net additions of 61,000 for the second quarter.
The company also said it expects to report net revenues of approximately $292 million and earnings before interest, taxes, depreciation and amortization of approximately $78 million for the second quarter ended June 30, compared to $316 million and $89.5 million, respectively, for the quarter ended March 31. Arch expects to report second quarter operating results on August 7th.