Globix discussing prepackaged bankruptcy with bondholders

New York, Dec. 31 - Globix Corp. said it is discussing a prepackaged bankruptcy filing with an informal committee of bondholders.

The Chapter 11 filing would be aimed at "significantly reducing the company's debt burden," the New York City-based internet hosting company said in a press release.

The informal committee represents 48% of the outstanding $600 million of 12½% senior notes, Globix said, adding that it is holding similar discussions with preferred stockholders.

Noting that there is no assurance the discussions will be successful, Globix also warned that any agreement would likely result in bondholders and preferred stockholders "owning nearly all of the equity" in the reorganized company, resulting in "a near total dilution" of the existing common stock.

Globix also said its fourth quarter revenue was $25 million compared to $25.9 million a year earlier, bringing fiscal 2001 revenue to $104.2 million compared to $81.3 million in fiscal 2000.

Fourth quarter EBITDA (earnings before interest, taxation, depreciation and amortization and restructuring charges) was negative $22.2 million compared to negative $15.3 million a year earlier and $15.5 million in the third quarter.

For fiscal 2001, Globix's EBITDA was negative $64.7 million compared to negative $59.3 million in 2000.

However Globix said it ended fiscal 2001 with $111.5 million of cash, which it said was ahead of expectations.

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