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EXHIBIT
99.1
PRESS
RELEASE ISSUED JULY 23, 2010
Global
Capacity Announces Restructuring Strategy
Chicago,
IL (July 23, 2010) - Global Capacity (parent: Capital Growth Systems, Inc. (OTC
Bulletin Board: CGSY.OB), the world's leading telecommunications information and
logistics company, today announced that it has initiated a formal process that
will result in the Company restructuring its balance sheet and capitalization
structure. This process will enable Global Capacity to emerge
as a stronger, more profitable company that is well positioned to continue
delivering the products and services that customers and the market have come to
expect from Global Capacity. Through this process, the Company is
expected to substantially strengthen its balance sheet, organizing its debt
obligations and past due trade payables. These changes will enable
the Company to drive organic growth and to further invest in
innovation. The process is expected to complete prior to year
end.
Global
Capacity has secured commitment for a capital infusion (debtor in possession
financing) required to restructure the Company within Chapter 11 of the US
Bankruptcy Code. The capital will be used to organize and satisfy
payables to critical vendors and fund working capital. The Company
also plans to eliminate as much of its existing debt as possible, equitizing the
balance sheet, and reducing the monthly cash drain required for debt
service. Through this process, the Company will seek to maximize
value for its creditors and shareholders, with a goal of achieving some form of
continuing participation for existing shareholders. The Company has
retained Capstone Investments as its financial advisor to manage this process.
Questions regarding the process may be directed to Capstone at
312-878-4888.
Global
Capacity expects to continue seamless service delivery to customers through this
process. The Global Capacity team, along with the Company’s supplier
partners, will continue to operate in a business as usual mode. The
debtor in possession (DIP) financing used to support this process will be used
to maintain supplier services on a current basis during the restructuring
process, and the plan of reorganization will include provisions to satisfy past
due obligations to critical suppliers. The satisfaction of these
obligations, combined with the reduction of debt from the balance sheet, is
expected to enable the Company to emerge from this process as a profitable
company with positive monthly cash flow. This financial strength is
expected to enable Global Capacity to generate organic growth, creating
opportunities to expand partnerships with key customers and
suppliers.
“As we
have stated to the market over the last several quarters, the number one concern
that Global Capacity has as a company is our balance sheet, and specifically the
amount of trade payables, convertible debentures, and senior debt that sit on
the balance sheet. Customers and suppliers have made it very clear to
the Company that addressing those balance sheet concerns is an absolute
requirement,” says Patrick Shutt, Global Capacity CEO. “Entering a
formal restructuring process is not something the Company takes lightly, and is
a course of last resort. However, the Company’s attempts to
restructure the balance sheet in an informal process over the past 14 months
have been unsuccessful, and we were left with no choice but to pursue a formal
process to organize the payables, reduce or eliminate the debt, and provide the
Company with a balance sheet strong enough to enable the business to
grow.”
For more
information on Global Capacity and our service offerings, please visit
www.globalcapacity.com.
About
Global Capacity
Global
Capacity (parent: Capital Growth Systems, Inc.) is a telecom information and
logistics company that leverages a unique collection of global telecom supply
and pricing data to enable transparency and automation in the global access
network market. The Company provides Software & Optimization
Solutions and Network Solutions that enable increased efficiency and reduced
cost of access networks for integrators, telecommunications companies, and
enterprise customers. Global Capacity is headquartered in Chicago,
IL, with offices and operational centers in the United States and European
Union. For more information, please visit www.globalcapacity.com
or contact the Company at 312-673-2400.
Forward-Looking
Statements
Certain
information discussed in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 and Federal securities laws. Although the Company believes that the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions at the time made, it can give no assurance that its
expectations will be achieved. Readers are cautioned not to place undue reliance
on these forward-looking statements.
Forward-looking
statements are inherently subject to unpredictable and unanticipated risks,
trends, and uncertainties such as: the Company's inability to accurately
forecast its operating results; uncertainty as to the volume of business or
level of profitability of network optimization contracts; the Company's
potential ability to achieve profitability or generate positive cash flow; the
availability of financing; the risks associated with procuring a listing of its
securities on one or more public stock markets; and other risks associated with
the Company's business. For further information on factors which could impact
the Company and its subsidiaries and the statements contained herein, reference
should be made to the Company's filings with the Securities and Exchange
Commission, including annual reports on Form 10-K, quarterly reports on Form
10-Q, and current reports on Form 8-K. The Company assumes no obligation to
update or supplement forward-looking statements that become untrue because of
subsequent events.
SOURCE:
Global Capacity, Inc.
www.globalcapacity.com
Customers and
Partners:
Jack
Lodge
Global
Capacity Chief Operating Officer
+1
781-902-5196
JLODGE@GLOBALCAPACITY.COM