Primus US parent files for Chapter 11 with debts of AUD$1 billion

Stan Beer
Tuesday, 17 March 2009 03:03

Opinion and Analysis

Mr Bhatia said it was important to differentiate between the different types of Chapter 11 bankruptcy filings.

"There is voluntary, consensual and forced. This is consensual between Primus and its bond holders," Mr Bhatia said.

“This is good news for Primus Australia because it results in increasing Primus Australia’s ability to re-invest in our local operations,” said Mr Bhatia.  “Since it was granted a license to operate in 1997, Primus has invested over $500 million in its network facilities in Australia.

“Primus Australia is a solidly profitable business that generates significant positive cash flow, making us financially independent and self sufficient,” Mr. Bhatia said. “No employees, customers, suppliers or business partners in Australia will be affected in any way by the financial restructuring activities of the U.S. holding company and there will be no loss jobs in Australia.

“We expect only to benefit from the restructuring since a large portion of local profits that were used in part to service the U.S. holding company’s debt may now be available for investment in organic expansion as well as acquisitions of synergistic telecom businesses throughout Australia.  It is a ‘win-win’ situation for the U.S. holding company and its bondholders, as well as Primus Australia and its customers, vendors and business partners in Australia.”    

Primus Australia’s network offers nationwide coverage through its own backbone network with facilities in 66 POIs and 282 DSLAMs across Australia, as well as nationwide long-distance telephone and high speed broadband services.  In addition, Primus operates its own fibre network in the five major capital cities, delivering a range services to residential and business customers including direct-connect services, ISDN, telephone, broadband, Ethernet and hosting services.