XO Communications (www.xo.com), a provider of web hosting and Internet services, announced on August 9, 2004 that it has closed a private placement of six percent class “A” convertible preferred stock for $200 million. XO offered the shares of preferred stock privately to XO stockholders that hold approximately 85 percent of XO’s outstanding common stock at present. Carl Icahn, chairman of the company, holds about 50 percent of the company’s common stock. His affiliates bought $190 million of the preferred stock. Each share of the preferred stock is initially convertible at $4.62 per share into 10.82251 shares of XO common stock.
Carl Grivner, CEO of XO Communications, said that this agreement demonstrated the continued support for XO’s ability to execute in the market and the company’s goal of achieving free cash flow positive. He added that the proceeds would be used for XO’s ongoing operations, continued investments in new customer solutions like voice-over IP services and potential acquisitions that would provide the company’s business with additional scale and cost synergies.
