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Optically Networked : News: XO Completes Sale of European ISP Business


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XO Completes Sale of European ISP Business
March 1, 2002
By Roy Mark

Financially troubled broadband provider XO Communications, Inc. (Quote) has completed the sale of its European Internet service provider business. Terms of the transaction were not disclosed but the Reston-Va.-based company took a $320.1 million charge in the fourth quarter to reflect the cost.

In November, XO said Forstmann Little & Co. and Telefonos de Mexico had agreed to invest $800 million in the company contingent upon XO restructuring its debt. The deal would give the two firms a 39 percent interest in XO. The remaining equity will be held by debtholders and current shareholders essentially would be left with nothing.

The company has a forbearance agreement that prevents its lenders from calling the company into default before April 15, but a recent published reports have said XO may file bankruptcy within the next two weeks to convince its creditors to accept the restructuring plan.

XO currently offers facilities-based broadband communications services in 63 markets throughout the United States. The company is also one of North America's largest holders of fixed broadband wireless spectrum, with licenses covering 95 percent of the population of the 30 largest U.S. cities.


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