XO seeks to raise up to $900M

XO Communications is seeking to raise up to $900 million in debt and equity, the carrier said in regulatory filings today.

XO said it planned to use the funds--raised “from time to time”--to repay debt, make acquisitions and/or use it for general purposes.

The company declined to elaborate on the proposed offering beyond the information included in regulatory filings today.

More than 90% of XO's debt is owned by its chairman, Carl Icahn, who also owns nearly 60% of the company’s common stock. At the end of September, XO had more than $366 million in long-term debt—about 9% more than it had a year earlier.

Near the end of September, XO’s directors formed a committee to help the company refinance its debt, hiring Cowen and Company to advise it.

Over the years, XO has repeatedly failed to meet the earnings requirements attached to its debt covenants. Although such failures officially could trigger the penalty of accelerating XO’s repayment requirements, the company has repeatedly been granted waivers preventing repayment acceleration. XO expects to fall short of those earnings requirements again next year and expects to fall short of its cash requirements by next year’s second quarter. At the end of September, XO had nearly $91 million in cash and equivalents.

XO’s charter allows it to sell up to 1 billion shares of stock. So far it has issued more than 182 million shares.