AVSC said that it expects to emerge from the reorganization process by April 2002. Robert Ellis, Chairman and CEO of the Company commented: "The Company has been and continues to struggle with its current level of debt which built up as a consequence of the acquisition strategy pursued in the late 1990's. Over the last 18 months, the Company's new management team managed the business to increase profitability to a point where the Company's outstanding indebtedness could be successfully refinanced. However the general economic downturn that started at the beginning of 2001 and the events of September 11th have had a direct impact on the Company. The Company's business divisions experienced an increasing decline in same-store hotel site revenues through the year as the number and size of business meetings were reduced in response to the economic downturn. In the immediate aftermath of the events of September 11, many business meetings were cancelled or postponed. While we have seen some recovery since early October, we believe that events of September 11 will continue to contribute to the decline in the number and size of business meetings being held in the medium term. The agreement reached with our lenders provides for a more appropriate capital structure, sufficient cash to fund operations and the ability to access capital to fund new growth initiatives. Most importantly, the terms of this agreement do not affect our operations, customers, suppliers or employees."
AVSC also announced that it has received $20 million in debtor-in-possession (DIP) financing from a syndicate of financial institutions led by JP Morgan Chase, which the Court has approved, subject to a final confirmatory hearing. The DIP facility will provide the company with additional liquidity to fund operations during the restructuring process, enabling the company to continue purchasing goods and services in the ordinary course and facilitating the company's provision of new audio visual equipment for its customers and clients.
AVSC's operations will continue without interruption and vendors and employees will be paid in the ordinary course of business. In addition, the company has obtained authorization from the court to pay all amounts owed to employees and vendors before and after the petition date, so that there will be no interruption in the company's operations or in the fulfillment of any obligations to employees and vendors. The company will maintain its commitment to providing the highest quality audiovisual equipment and related services to its customers and clients. Vendors will be paid for all goods furnished and services provided.
The Company's international operations are not included in the Chapter 11 filing and will continue to conduct business as usual. AVSC is a provider of audiovisual equipment rentals, staging services and related technical support services to hotels, event production companies, trade associations, convention centers and corporations in the United States. In addition to its United States operations, the Company has operations in Canada, Mexico, the United Kingdom,Belgium, and the Caribbean. AVSC is listed on the OTC Bulletin Board and trades under the symbol AVSV.