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Optical/IP

McLeod Looks for $100M in IPO

McLeodUSA Inc. (Nasdaq: MCLD) laid out the details of its second-try IPO in an amended S-1 filed with the Securities and Exchange Commission (SEC) Aug. 20.

The company plans to raise approximately $100 million from an offering of 7,150,000 common shares with an offering price between $13 and $15.

An additional 3,900,000 shares of common stock will be available through selling stockholders, bringing the total IPO to 11,050,000 shares. McLeod will not receive any proceeds from the shares sold by selling stockholders. The company's listing has been approved by the Nasdaq and will trade under the symbol "MUSA" according to the filing.

Timing of the IPO remains uncertain. A company spokesman declined to comment, citing a self-imposed quiet period McLeod won't lift until after the IPO.

The small communications service provider has had a big share of problems in its history. It emerged from Chapter 11 bankruptcy protection for the second time in January 2006 and is now under the direction of CEO Royce Holland, a telecom veteran who has founded several carriers, including Allegiance Telecom and MFS Communications. (See McLeod Emerges From Chap. 11 and McLeodUSA Faces Nasdaq Delisting.) This is its second attempt at an IPO.

While the company is hoping to reverse its fortunes, it lost $23.8 million in the first half of this year compared to a loss of $11.3 million in the same period last year. Even so, it recently acquired Mpower Communications and its 5,000 Chicago-area customers and network assets for $17.3 million. (See McLeod Picks Up Mpower Pieces.)

McLeod provides copper-based communications services to residential customers, mainly in the Midwest. It also provides IP-based services to small and mid-sized businesses. All told, it serves 83,500 residential customers and 251,000 business lines.

— Raymond McConville, Reporter, Light Reading

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