January 28, 2008
Dear Clients, Employees and Friends of PRC,
As you know, PRC and certain affiliates filed for Chapter 11 protection on January 23. I would like to share with you the reasons for the filing and provide you some information on the progress that PRC has achieved toward exit. I also want to assure you of PRC’s commitment to serving its clients and their customers and to tell you about the measures we have undertaken to fulfill that commitment.
PRC filed Chapter 11 to reduce its balance sheet leverage and to effect a financial restructuring of its debt. As a result of the greater financial stability and flexibility that will result from the restructuring, PRC will emerge from Chapter 11, in a period of months, a more dynamic competitor in our markets.
PRC entered Chapter 11 with a pre-negotiated agreement with its two major secured creditor groups. This is a significant head-start on our restructuring and PRC has a clear path toward exit. Further, a group of PRC’s senior secured lenders has committed to providing $30 million in debtor-in-possession (“DIP”) financing for the reorganization. This financing should be more than sufficient for PRC’s needs during the comparatively short time that PRC is under Chapter 11 protection. The same lender group has also stated its willingness to provide $45 million in credit facilities to PRC when it exits Chapter 11. These three milestones – a pre-negotiated agreement with major creditors, DIP financing in place and commitments for exit financing – make PRC well-positioned to exit quickly.
While PRC is under Chapter 11 court protection, our senior management team will be running its business professionally and with the drive and enthusiasm for excellence that it has always demonstrated. We will be focusing on providing services to our clients and to their customers, on hitting our quality commitments and on presenting a consistent, positive face to the marketplace.
PRC recognizes the importance of its people and the role they play in our clients’ business. Our senior executive team is in the field, visiting centers and supporting our superb local management. They are informing staff, answering questions and collaborating with on-site client representatives. We have held “town hall” meetings at all levels and will hold more. We have assured them as to the continuity of their wages, salaries and benefits. We have enhanced our internal communication channels so that our management responds rapidly to any lingering issues and our staff is not distracted from providing the excellent service our clients and their customers deserve.
In coming weeks, PRC will be keeping our clients and people informed of our progress toward exit and listening to their feedback. We pledge to provide frequent updates and to follow up on any issues that arise.
It has been very gratifying that major clients of PRC have expressed their support for PRC, their understanding of the Chapter 11 process and their willingness to maintain a continuous dialogue with our management team.
In closing, thank you, on behalf of PRC’s management and employees, for your business and support during our reorganization. If we can answer any questions, do not hesitate to speak your account team or with me. You can also keep current on PRC’s progress toward exit by visiting our website’s Reorganization section regularly www.prcnet.com.
Sincerely,
Jerry McElhatton
CEO |
