WEST POINT,ITC-DeltaCom, an integrated telecommunications and technology provider to businesses in the South, says all classes of creditors and stockholders voting have overwhelmingly approved its proposed plan of reorganization.

The final voting report will be filed this week with the U.S. Bankruptcy Court for the District of Delaware. The reorganization plan remains subject to confirmation by the bankruptcy court, and a hearing on confirmation of the plan is scheduled for Oct. 10. If the court approves the proposed plan, it is expected that the plan would be implemented, and that ITC-DeltaCom would exit chapter 11 proceedings later this month.

Under the terms of the proposed plan, all of ITC-DeltaCom’s $415 million principal amount of senior note debt will be eliminated and the company’s senior noteholders will receive 81.5 percent of the reorganized company’s common stock. The company is based in West Point, GA.

Also, all of ITC-DeltaCom’s $100 million principal amount of subordinated convertible note debt will be eliminated and the company’s convertible noteholders will receive 5 percent of the reorganized company’s common stock. The existing holders of the company’s stock collectively will receive a total of 1 percent of the reorganized company’s common stock.

Director and current stockholder Campbell B. Lanier, SCANA Corporation, also a current stockholder, and other investors have agreed to purchase $30 million of a new issue of the reorganized company’s convertible preferred stock. The preferred stock will be convertible into a total of 10.5 percent of the reorganized ITC-DeltaCom’s common stock, and the purchasers also will receive warrants to purchase up to an additional 2 percent of the reorganized company’s common stock. In consideration for this financing commitment, these investors will receive shares of common stock representing 2 percent of the reorganized company’s common stock.

The existing stockholders will be entitled to purchase on a pro rata basis, up to a specified amount, the convertible preferred stock and warrants that Lanier, SCANA and the other investors have agreed to purchase. The purchase commitments of these investors will be proportionately reduced by any purchases made in the rights offering.

Assuming repayment of certain capital lease obligations, the ITC-DeltaCom expects that its total indebtedness will be reduced from $724 million at March 31 to $194 million of indebtedness under its senior credit facility and capital leases. As a result, the company also estimates that its 2002 annual interest expense on a pro forma basis will decrease from approximately $55 million to approximately $13 million.

ITC-DeltaCom: www.itcdeltacom.com