RealTime IT News  Cisco, VCs Take Over as Cogent Restructures
Washington, D.C.-based Cogent Communications Friday filed a
restructuring plan with the SEC. The plan reduces the company's
debt significantly and lengthens the payment terms on the debt
that remains.  The company urgently needed to restructure the
debt because it was had defaulted on covenants on the majority
of the debt, which consists of equipment finance from San Jose,
Calif.-based Cisco Systems. Cogent owed Cisco $262.8 million,
and had about $39 million in cash at the start of the year,
which was down to $12 million on March 31, 2003. Under the
agreement, Cisco was allowed to demand all of the money it was
owed or take over the company.  The restructuring will convert 5
series of preferred stock (series A through E) into common
stock, and issue several more series of preferred stock (Series
F, G, H, and "Investors Preferred") to Cisco and to venture
capitalists who are injecting $41 million into the firm, giving
the company enough cash to su