Struggling EqualNet Holding Corp. said Monday it has completed a new financing arrangement and announced the appointment of a new chairman.|
The Company (ENET) also said it has received court approval to acquire SA Telecommunications Inc. (STEL) for $3.4 million cash and $6 million in preferred stock.
Houston-based EqualNet said it sold four million shares to the Willis Group for $1 each and intends to use the cash infusion for general corporate purposes.
As part of its deal with the Willis Group, MCM Partners, and Advantage Fund Ltd., EqualNet will also acquire the network assets and switches formerly used by Total World Telecommunications, Inc. (TWTI).
EqualNet has been managing those assets since Oct.1.
Both the funding arrangement and TWT acquisition have been approved by EqualNet shareholders, the company said.
In addition, EqualNet has named Mark Willis, founder and president of Willis Group, to the post of chairman. The company's former chairman, Zane Russell, will remain on the board and with the company in a senior management role. EqualNet, which provides telecommunications, Internet and other services, also said it is "actively" seeking a new chief executive.
The company also said it named Mitchell H. Bodian, John Isaac Epley, James T. Harris and Ronald J. Salazar to its board, expanding board membership to eight. Walter V. Klemp and Terry Parker resigned as directors following the closing of the transactions.
Separately, in connection with the SA Telecommunications acquisition, the company said it will assume $4 million in debt to be liquidated by SA Telecommunications accounts receivable with a $1 million shortfall guarantee.
The acquisition is contingent upon EqualNet shareholders approval.
EqualNet agreed to acquire SA Telecommunications in January, but needed the approval of the court supervising SA Telecommunications's Chapter 11 bankruptcy proceedings.
SA Telecommunications, a switch, long-distance telecommunications carrier, had 1996 revenue of $35.6 million.