Otelco Declares Distribution Payment to IDS Holders
February 27 2012 - 3:00PM
Business Wire
Otelco Inc. (NASDAQ: OTT) (TSX: OTT.un), a wireline
telecommunication services provider in Alabama, Maine,
Massachusetts, Missouri, New Hampshire, Vermont and West
Virginia, today announced that its Board of Directors has declared
a distribution of $0.42 per Income Deposit Security (each an
“IDS”), which will be made on March 30, 2012, to holders of record
at the close of business on March 15, 2012. The distribution
represents the twenty-ninth consecutive quarterly distribution
since the company completed its initial public offering in December
2004.
Each IDS is comprised of one share of Common Stock paying
dividends at the direction of the Board of Directors and $7.50
principal amount of 13% senior subordinated notes due 2019 with
interest paid quarterly. The senior subordinated notes are callable
at a premium of 6.5% plus accrued interest during 2012, with the
premium declining by 1.3% per year through 2016.
The distribution consists of a dividend of $0.17625 per share of
common stock and an interest payment on the senior subordinated
notes for the period from December 30, 2011, through March 29,
2012, of $0.24375 per note. Currently, it is anticipated that a
portion of the Company’s dividends will be qualified dividends and
the balance will be treated as a return of capital for shareholder
tax purposes in 2012.
ABOUT OTELCO
Otelco Inc. provides wireline telecommunications services in
Alabama, Maine, Massachusetts, Missouri, New Hampshire, Vermont and
West Virginia. The Company’s services include local and long
distance telephone, network access, transport, digital high-speed
data lines and dial-up internet access, cable television and other
telephone related services. With more than 102,000 voice and data
access lines, which are collectively referred to as access line
equivalents, Otelco is among the top 25 largest local exchange
carriers in the United States based on number of access lines.
Otelco operates ten incumbent telephone companies serving rural
markets, or rural local exchange carriers. It also provides
competitive retail and wholesale communications services through
several subsidiaries. For more information, visit the Company’s
website at www.OtelcoInc.com.
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