May 1, 2003 -- Terremark Worldwide, Inc. has raised $25 million to complete a complex financial restructuring that it says will fund its operations through its projected break-even date later this year.
Terremark, which operates the NAP of the Americas in Miami, says it completed three interrelated deals that will convert $54 million in debt to equity at a price of 75 cents a share, eliminating $5.2 million in annual interest payments.
"Over the past six months, Terremark has been working diligently to transform its financial standing," said Terremark's Chairman and CEO, Manuel D. Medina. "Today, we are proud to be able to publicly share the results of these efforts - all of which are tremendous achievements in the present economic environment."
"The proceeds from these closings give the company sufficient liquidity to fully fund operations through projected cash flow break even," said Medina.
The deals also avert a potential cash crisis, resolving issues with several obligations on which Terremark was in default. In the transactions announced today, Terremark accomplished the following:

• Raised $25 million through the sale of subordinated debt, which can be converted into common stock at a price of 75 cents per share, in turn allowing it to complete a refinancing of its bank debt.
• Restructured its loan with Ocean Bank, converted $15 million of the debt into shares of common stock at 75 cents per share, and extended the term of the remaining $28.9 million until April 30, 2006.
• Converted $22.6 million in debt held by CRG LLC into Terremark common stock valued at 75 cents per share. CRG had previously purchased the debt from Cupertino Electric and Kinetics Systems, both of whom were construction contractors for the NAP of the Americas.

Terremark had been in default on the $22.6 million trade debt to Cupertino and Kinetics, and had missed a $1 million payment due to Ocean Bank, according to SEC documents. The company had also been unable to pay $550,000 in rent for its space at the Technology Center of the Americas (TECOTA), where it maintains the NAP of the Americas.
The NAP, a network access point streamlining Internet access between the Southeast US and Latin America, opened in June 2001. Last month the company said it had gained 18 new customers in a six-week period, including a major contract with the US State Department.
"Based on our existing contracts, including those recently announced with the U.S. Government and new enterprise customers, and the strength of our sales pipeline, we expect to achieve cash flow break even by the end of the calendar year;" said Medina.
Terremark is a Miami-based provider of Internet infrastructure services.