Wireless backhaul provider FiberTower laid off 40 percent of its staff and halted all capital spending yesterday amid the resignation of two board members and financial difficulties that caused it to miss a $1.3 million interest payment.
The failure to make the semi-annual payment constitutes a default on its debt if the company is unable to pay the bill within a 30-day cure period, during which it will evaluate its options to manage its debt.
The company had 138 employees as of June 30, 2011. The remaining staff will work to maintain day-to-day operations as the company decides how to proceed.
Board chairman John Kelly resigned Nov. 14 along with board member Phil Kelley. One day later, board member Randall Hack also resigned.
FiberTower said in an announcement Wednesday that its problems began "as a result of continued customer early service terminations" and its decisions to "limit investment in its legacy network."
As a result, the company may have to take impairment charges of up to $170 million on its network equipment.
The drop in customer demand also reduced the value of FiberTower's spectrum licenses. The airwaves held a carrying value of $287.5 million during the first half of the year, but are now only worth between $87 million and $129 million.
FiberTower has not yet determined the full impact of the impairment charges and again delayed filing its third-quarter report with the SEC. The failure to file the financial document could get its stock delisted from Nasdaq, which has sent FiberTower a letter of noncompliance. FiberTower has 60 days to submit a plan to regain compliance.
FiberTower holds spectrum in the 24 GHz and 39 GHz band and owns carrier-grade fiber and microwave networks in 12 markets. The company provides wireless backhaul to mobile operators and also provides service to government and enterprise markets.