PRIMUS Telecommunications

Primus Profits From Unorthodoxy

From the Washington Post

"The payoff came last week, when Primus announced that its profit had more than doubled despite a drop in revenue, in large part because it cut its quarterly interest payments by $13.5 million to $17.7 million. "

By Washington Post Staff
Monday, May 6, 2002

Primus Telecommunications Group Inc. is demonstrating that sometimes it pays to make
an unpopular move.

When cash was tight a year ago, Primus started spending to buy back debt.

"We used our precious cash, contrary to advice of investment bankers, and bought back $480 million in high-yield debt," said John F. DePodesta, co-founder and executive vice president of the McLean-based international telecommunications provider.

Primus also exchanged preferred securities for equity, and renegotiated its vendor financing agreements, he said.

In effect, Primus reduced its debt by more than 50 percent.

The payoff came last week, when Primus announced that its profit had more than doubled despite a drop in revenue, in large part because it cut its quarterly interest payments by $13.5 million to $17.7 million.

As companies such as Qwest Communications International and WorldCom Inc. face questions about their billions in debt, Primus is patting itself on the back.

"We have bought ourselves a lot of flexibility, because we no longer need fresh capital," DePodesta said.

View the article in the Washington Post

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