IDT Announces 99% Participation in Tender Offer and Consent
Solicitation Positions Company to Pursue Financing for Net2Phone
April 26, 1999
IDT Corporation (NASDAQ: IDTC) announced today that as of Friday,
April 23, 1999, $99,620,000 of $100,000,000 principal amount of
the Company's outstanding 8.75% Senior Notes due 2006 (the "Notes")
had been tendered in connection with the Company's tender offer
and consent solicitation (together, the "Tender Offer").
In an effort to accommodate remaining holders of the Notes and
to ensure prompt consummation of the Tender Offer following its
expiration, the Company has extended the expiration date of its
Tender Offer to 12:00 Midnight, New York City time, on Friday, April
30, 1999 unless further extended or terminated by IDT. The Tender
Offer was commenced on March 29, 1999 and was set to expire on 12:00
Midnight, New York City time, on April 23, 1999. The Notes, of which
an aggregate principal amount of $100,000,000 are currently outstanding,
were issued in February 1998. The purchase price for the Notes will
be $1,020 in cash per $1,000 principal amount, plus accrued and
unpaid interest up to, but not including, the date of payment.
With 99% participation by the Note holders to date in the Tender
Offer, well in excess of the required majority of 51%, the Company
expects to promptly execute a supplemental indenture relating to
the Notes, enabling the Company to effect one or more possible financing
transactions involving Net2Phone, Inc., a Delaware corporation and
the subsidiary of IDT that conducts its Internet telephony operations.
The proposed amendments will become operative only when the tendered
Notes are accepted for purchase by IDT pursuant to the offer.
In addition, IDT is in the process of negotiating the final documentation
relating to its previously announced $150 million credit facility.
IDT plans to utilize proceeds from the credit facility to repurchase
the tendered Notes, to fund capital expenditures, and for general
working capital purposes. The Company's obligation to consummate
the Tender Offer is conditioned upon receipt of sufficient borrowings
under the credit facility to fund the Tender Offer. In addition,
the offer to purchase the Notes, the proposed amendments to the
Indenture related thereto, and the $150 million credit facility
are intended to provide IDT with greater operating flexibility.
As previously reported, Net2Phone has executed a term sheet with
more than one significant strategic investor relating to an investment
in Net2Phone's equity securities, and Net2Phone is negotiating with
other significant investors. However, no assurances can be given
that any such transaction will in fact occur.
BT Alex Brown Incorporated will continue to serve as the Dealer
Manager and the Solicitation Agent for the transaction. U.S. Bank
Trust National Association, the trustee under the Notes, will continue
to serve as the Depositary for the transaction.
IDT is a leading emerging multinational carrier that combines its
position as an international telecommunications operator, its experience
as an Internet service provider and its leading position in Internet
telephony to provide a broad range of telecommunications services
to its wholesale and retail customers worldwide. The Company provides
its customers with integrated and competitively priced international
and domestic long distance, pre-paid calling cards, Internet access
and, through its Net2Phone product offerings, Internet telephony
services including Net2Phone Direct, Net2Fax, and Click2Talk.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward-looking
statements include IDT's expectations concerning, among other things,
its ability to receive sufficient funds to repurchase the tendered
Notes and to consummate the offer. These statements, made as of
the date of this press release, are based upon current expectations
and are subject to risks and uncertainties that could cause actual
results to differ materially from those projected including IDT's
ability to obtain the credit facility and Net2Phone's ability to
consummate the sale of equity securities to strategic investors.
IDT assumes no obligation to update the forward-looking statements,
or to update the reasons why actual results could differ from those
projected in the forward-looking statements. Investors should consult
all of the information set forth herein and the other information
set forth from time to time in IDT's reports filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1933 and
the Securities Exchange Act of 1934, including the Company's Annual
Report on Form 10-K, as amended, for the year ended July 31, 1998,
and its Quarterly Reports on Form 10-Q for the three months ended
October 31, 1998 and January 31, 1999.