Shane Menking, USOL's CFO, tells GlobeSt.com that the company is working with the consortium of banks holding its credit facility. "By no means is there an imminent bankruptcy or confrontational relationship associated with it," he says. "It is a very good relationship, a relationship we've maintained since 1999." The lenders are BNP Paribas, Deutsche Bank and Coast Business Credit, based in California.
The auditor's warning came with USOL's financial results for 2001, which were released this week.
Should USOL, which provides telecommunications services to apartment complexes and other multifamily communities, not be able to draw money from its credit facility, it would be unable to fund its operations. "Until we get that resolved there is a level of uncertainty as to our ability to continue to fund operations for this year," Menking says. "We feel very confident we will get that accomplished in a relatively short period of time."
USOL had drawn down $15.7 million of its $17.5 million credit facility at the end of 2001. Since then, Menking says, the company has reduced its debt to $12 million.
The agreement with the lenders requires USOL to meet the minimum on revenue, operating cash flow and the number of units to which its services are available. Menking says the company met the minimum unit count, but not revenue or cash flow.
Menking says USOL is negotiating to acquire another company that would help it meet the compliance standards. Those negotiations, however, have slowed lenders' talks because the acquisition requires changes to the lending agreement.
The company offers telecom services through subsidiary, US OnLine., which services more than 180 MDU communities in Austin, Dallas-Fort Worth, Denver, Houston, San Antonio, Washington, DC and the Pacific Northwest. Customers include communities owned by Amli Residential, Simpson Housing and Gables Residential.
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