Oct. 2, 2002 -- Equinix, Inc. today announced a complex series of deals in which it will receive a cash infusion, dramatically reduce its debt load and expand into the Asia-Pacific market.
Company executives say the transactions with Singapore Technologies Telemedia, Pihana Pacific and its senior bond holders will result in a "new Equinix" that will be run by the current Equinix management team.
"An imperative for this company has been to fix its balance sheet," said Equinix CEO Peter Van Camp. "What's exciting about today's announcement is that it accomplishes this, and a great deal more."
If the transactions are completed, Equinix will retire more than $130 million in debt and reduce its annual debt payments from $40 million to less than $12 million, according to chief financial officer Renee Lanam.
The plan includes four major components:

• Singapore Technologies Telemedia (ST Telemedia) will invest $30 million in Equinix in exchange for 89 million shares of common and preferred stock and warrants to purchase another 29 million shares.
• Equinix will acquire Pihana Pacific, which operates Internet exchanges in seven Pacific rim markets. Equinix will issue 64 million shares of common stock to buy Pihana's assets, which include data centers and $25 million in cash.
• Equinix will also acquire ST Telemedia's Internet exchange business, i-STT, which includes a data center in Singapore and a joint venture in Bangkok, Thailand. Equinix will issue 88 million shares of common stock to buy i-STT.
• Equinix will restructure its debt, using the cash from ST Telemedial and the Pihana deal to retire most of its high-yield bonds and pay down $8.5 million of its bank debt. The company said it expects to retire 80 percent of its bonds in exchange for $15 million in cash and 57 million shares of common stock.

When the deal closes and all the new shares are issued, existing shareholders will hold 33 percent of the common stock, followed by ST Telemedia (28 percent), current Pihana shareholders (21 percent) and senior noteholders (18 percent).
But ST Telemedia could wind up with up to 48 percent of the common stock if it exercises the warrants it is receiving from Equinix. Current shareholders would then own 24 percent of the company.
"We've removed the financial question mark, and designed a path to repay our senior debt," said Van Camp. He acknowledged that the deals would dilute the holdings of owners of Equinix common stock, but said it was unavoidable.
"With this transaction, the position of existing shareholders will exceed that of any other viable options in a restructuring of this magnitude," said Van Camp.
Equinix, based in Mountain View, Calif., provides core Internet exchange services that allow Internet infrastructure companies, enterprises and content providers to grow, manage and control their networks.