strategy that includes selective acquisitions. We have funded our acquisitions,
capital expenditures and working capital requirements to date through a
combination of secured and unsecured borrowings and equity contributions. We
intend to use amounts available under the credit facility, future debt and
equity financings and internally generated funds to finance our working capital
requirements, capital expenditures and future acquisitions.
Over the next five years, we intend to spend approximately $76 million to
upgrade our existing systems and the systems subject to pending acquisitions.
These capital expenditures are expected to consist of:
. approximately $45 million to upgrade the bandwidth capacity of these
systems and to employ additional fiber in the related cable plant,
. approximately $16 million for ongoing maintenance and replacement and
. approximately $15 million for installations and extensions to the related
cable plant required as a result of growth in our subscriber base.
Upon the completion of our planned upgrades, virtually all of the cable plant
included in these systems will have a bandwidth capacity of 450 MHz or greater
and approximately 85% will have a bandwidth capacity of 550 MHz or greater. For
additional information, please refer to "Business--Technology" section of this
Our financing at the time we completed the acquisition of Cable Michigan
consisted of the credit facility, the Bridge Credit Facility, the ABRY
Subordinated Bridge and a new equity investment of approximately $80.0 million.
We used the funds obtained in the initial financing to consummate the merger
with Cable Michigan, to refinance existing Cable Michigan indebtedness and
existing Avalon indebtedness and to pay fees and expenses. The net proceeds of
the old note offering and the Senior Subordinated Note offering were used
principally to repay approximately:
. $125.0 million of borrowings under the credit facility,
. $105.0 million of borrowings by the Issuers under the Bridge Credit
. $18.0 million of borrowings by the Issuers under the ABRY Subordinated
Bridge, together in each case with accrued interest.
After giving effect to the foregoing, the Bridge Credit Facility was paid in
full and terminated and there were no amounts outstanding under the ABRY
As of December 31, 1998, on a pro forma basis, after giving effect to all
completed and pending acquisitions and the Reorganization, the Issuers would
have had no outstanding indebtedness other than the old notes and debt of the
Issuers' subsidiaries and the Operating Companies would have had $330.2 million
of indebtedness outstanding and $17.0 million of trade payables and other
liabilities outstanding. Such indebtedness includes $179.6 million under the
credit facility and $150.0 million under the old notes, but excludes $30.0
million of availability under the revolving credit facility.
Under the credit facility, the Operating Companies currently have:
. a $30.0 million revolving credit facility, and
. senior term loan facilities consisting of a $120.9 million term loan
facility which matures on October 31, 2005 and a $170.0 million term loan
facility which matures on October 31, 2006.
In addition, the credit facility provides for up to $75.0 million in an
uncommitted acquisition facility. Subject to compliance with the terms of the
credit facility, borrowings under the revolving credit facility will be
available for working capital purposes, capital expenditures and pending and
future acquisitions. The revolving credit facility terminates, and all amounts
outstanding thereunder are payable, on October 31, 2005. No additional
borrowings may be made under the senior term loan facilities after March 31,