The financing consists of the following: a senior loan facility in the amount of US$30,000,000 from Dresdner Bank Canada; and a subordinated loan facility of US$13,000,000 from TD Capital Group Limited, a division of the Toronto-Dominion Bank, and from Tyco Submarine Systems Limited (formerly AT&T Submarine Systems), the world's largest supplier of submarine cable systems.
The syndicated financing being provided to TeleBermuda matures in five years. As part of the financing, the Company has also issued warrants to the subordinated lenders to acquire up to 1,529,412 common shares of the Company at prices ranging from US$8.50 to US$9.25 per share.
TeleBermuda's state-of-art submarine fibre-optic cable was recently installed from Bermuda to a landing point near the international trans-Atlantic telecommunications hub at Tuckerton, New Jersey, by Tyco Submarine Systems. The system is expected to be landed and fully operational in October, 1997.
TeleBermuda successfully launched its initial international satellite telecommunications system in May, 1997, as Bermuda's first, fully-licensed, competitive long-distance telephone service. In its first 60 days of operations, TeleBermuda achieved residential and commercial market shares more than double the levels initially projected by the company for that period.
The existing total value of overseas telecommunications traffic in and out of Bermuda is estimated to be approximately US$100 million per year.
TeleBermuda's 2.5-gigabit fibre-optic cable system - known as "BUS-1" - will support a full range of advanced digital telecommunications services for the Bermuda market, exponentially increasing the Island's total existing cable capacity.
TeleBermuda expects that its ability to offer state-of-the art telecommunications services through the Company's new fibre-optic cable will be particularly attractive to Bermuda's growing community of multinational corporations involved in financial services, insurance, and international trade and commerce.
The TeleBermuda cable system is designed for expansion up to a 40-gigabit capacity, providing the Company with the added opportunity to greatly enhance revenue streams through the sale of high bandwidth capacity to other international carriers worldwide. To this end, the Company is also currently investigating the extension of its cable network directly to Europe and Latin America.
TeleBermuda's common shares are listed on the Bermuda Stock Exchange and trade under the symbol TBI (Bloomberg: TBI.BH).
For further information, please contact:
Ken Spurling
Hamilton, Bermuda (441) 296-9000
Michael Kedar
Toronto, Canada
(905) 470-0583