Regional, flat-rate CDMA operator Revol Wireless reached an agreement late last month with bondholders that the company said will prevent a possible bankruptcy.
Scott Bergs, Revol’s chief operating officer, said Revol was unable to repay its senior secured notes due Dec. 15, and as a result began negotiations with its bondholders. He said the company reached an agreement with the bondholders Dec. 30 that extends the deadline for the repayment to April 30. He said the extension will give Revol additional time to obtain the necessary funds. However, in the event the company remains unable to repay the notes when they become due in April, Bergs said the agreement outlines a transfer of control of Revol to its bondholders–a stipulation he said is intended to prevent Revol from having to file for bankruptcy.
Bergs declined to name the bondholders. The company owes $150 million.
Bergs said Revol encountered some unexpected “hiccups in our refinancing plan,” and the company was therefore unable to make its Dec. 15 payments. “We still remain excited about our growth trajectory,” he said.
According to a person with knowledge of the situation, Revol–a privately held carrier with 350 employees and operations in Ohio and surrounding areas–is currently in merger discussions with another regional, flat-rate CDMA carrier, Mobi PCS in Hawaii. Both companies share the same main investors–Boston’s M/C Venture Partners and Virginia’s Columbia Capital–as well as the same CEO, Bill Javis. Revol’s Bergs acknowledged that such a tie-up could be explored, and said the companies have collaborated in the past, but declined to comment on any possible merger discussions.
Interestingly, Revol’s financial troubles come during a busy time for the carrier: Revol plans to begin selling its first Android smartphone, the LG Optimus, Jan. 7 for $299. The phone will be available with a no-contract, monthly service plan of $55 per month, which includes unlimited talking, texting and data.