Centennial Communications makes building balance sheet cushion "a primary focus"

By Peter Heap

New York, March 20 - Building a bigger balance sheet cushion "is a primary focus" at Centennial Communications Corp., chief financial officer Thomas FitzPatrick said Thursday.

"The plan, as we have stated over and over again, is to continually search for ways to build cushion against our covenants and liquidity," FitzPatrick said in Centennial's third quarter earnings conference call.

"The management team and virtually all constituencies - bondholders, shareholders, bank debt holders - would like to see those cushions build."

But FitzPatrick added that Centennial is confident it can meet all its obligations.

"We don't have any guns to our head," he told the conference call.

He spoke in response to a question about asset sales.

During the quarter ending Feb. 28, the Wall, N.J. telecommunications company closed on the sale of 64 U.S. wireless towers, bringing sales during fiscal 2003 to 105 towers.

As far as further building the balance sheet cushion is concerned, FitzPatrick said: "The questions is the cost of doing so - and we have got to find transactions which are food to our shareholders."

Liquidity has improved faster than expectations, the CFO said, a lot of it due to balance sheet management through reducing inventories and addressing receivables.

"It's finding the lowest cost way to build cushions," he added.

At the end of the third quarter, Centennial had just under $1.7 billion of debt (on a net basis) compared to $1.8 billion a year earlier.

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