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PRIMUS Telecommunications Raises $13 Million in New Debt Financing and Restructures Existing Major Vendor Facility

Business Wire, March 17, 2003

Business Editors/High-Tech Writers

MCLEAN, Va.--(BUSINESS WIRE)--March 17, 2003

PRIMUS Telecommunications Group, Incorporated (Nasdaq: PRTL), a global facilities-based telecommunications services provider offering an integrated portfolio of voice, data, Internet, and Web hosting services, today announced that it has obtained $13 million in new debt financing and completed the restructuring of an existing major vendor facility.

PRIMUS's wholly-owned subsidiary, PRIMUS Telecommunications Canada Inc., entered into a C$20 million (US$13 million) secured credit facility with a major Canadian financial institution. The proceeds from the two-year, non-amortizing facility are earmarked for acquisitions.

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PRIMUS also announced that it had consummated a transaction to restructure $58 million of secured loan facilities that had funded the purchase of telecommunications equipment. Essentially, the transaction consolidates three former secured loans into a single secured facility with a maturity date of December 1, 2006. As a result of the transaction, PRIMUS is able to defer principal payments that were otherwise due beginning in the first quarter in 2002 for eighteen months; principal payments will now commence in July 2003 at a reduced level for six months, and level amortization payments will thereafter commence in January 2004. In addition, the interest rate on the restructured facility has been reduced from a blended fixed rate of approximately 10.6 percent from the three former facilities to a fixed rate 8 percent facility. The new consolidated facility is secured by the equipment (primarily switches) purchased with the proceeds of the original loans, as well as additional network equipment located in the United States. The restructured facility also contains covenants and financial ratios that are customary in such transactions.

In commenting on the transactions, K. Paul Singh, Chairman and Chief Executive Officer of PRIMUS, stated: "We are pleased to report these developments which reflect the substantial improvement in PRIMUS's financial condition. The restructuring of the $58 million of secured equipment facilities, which represents almost half of our remaining vendor debt, provides PRIMUS with substantial cash flow benefits and evidences the lender's confidence in PRIMUS's future prospects. The facility secured by our Canadian subsidiary demonstrates the ability of our major operating units to attract capital in their own right. These developments announced today, together with our anticipated receipt later this month, assuming requisite shareholder approval, of the $9 million in remaining proceeds from our Series C Convertible Preferred Stock issuance in a transaction led by funds affiliated with the American International Group (AIG), bolster our near-term liquidity position. As a result, we do not have any immediate plans to pursue the issuance of additional Convertible Preferred Stock that may be issued without the consent of the holders of Series C Convertible Preferred Stock in accordance with the terms of the Series C Convertible Preferred Stock as previously disclosed by the Company."

The Company and/or its subsidiaries will evaluate and determine on a continuing basis, depending upon market conditions and the outcome of events described as "forward-looking statements" in this release and its SEC filings, and future negotiations the Company may pursue with the holders of certain of its outstanding debt securities, the most efficient use of the Company's capital, including investment in the Company's network and systems, lines of business, potential acquisitions, purchasing, refinancing, exchanging or retiring certain of the Company's outstanding debt securities in privately negotiated transactions, open market transactions or by other means to the extent permitted by its existing covenant restrictions.

PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL) is a global facilities-based telecommunications services provider offering bundled voice, data, Internet, digital subscriber line (DSL), Web hosting, enhanced application, virtual private network (VPN), and other value-added services. PRIMUS owns and operates an extensive global backbone network of owned and leased transmission facilities, including over 300 IP points-of-presence (POPs) throughout the world, ownership interests in over 23 undersea fiber optic cable systems, 19 international gateway and domestic switches, a satellite earth station and a variety of operating relationships that allow it to deliver traffic worldwide. PRIMUS also has deployed a global state-of-the-art broadband fiber optic ATM+IP network and data centers to offer customer Internet, data, hosting and e-commerce services. Founded in 1994 and based in McLean, VA, PRIMUS serves corporate, small- and medium-sized businesses, residential and data, ISP and telecommunication carrier customers primarily located in the North America, Europe and Asia Pacific regions of the world. News and information are available at PRIMUS's Web site at www.primustel.com.

Business Services Industry

PRIMUS Telecommunications Raises $13 Million in New Debt Financing and Restructures Existing Major Vendor Facility

Business Wire, March 17, 2003

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