Jul 12, 2002 : WorldCom Will Not Pay MCI Dividend
📅 - WorldCom Inc. said on Thursday that it would not be able to pay a dividend of $71 million to shareholders of the company's consumer long-distance unit MCI Group.
Reversing a recent promise that it would pay the MCI dividend, WorldCom said the refusal to pay the dividend, intended for Monday, was part of the company's larger effort to save money, which includes cutting 17,000 jobs and selling an unprofitable wireless business and non-core assets in Latin America.
WorldCom says it is in talks to secure $3 billion in funding, a reduction from the $5 billion it originally sought. The funding, combined with the cost-cutting measures, would help the company meet interest payments and could delay what many consider to be an inevitable bankruptcy.
While the company is investigating several options for restructuring, WorldCom said its plans for recovery could involve filing for bankruptcy protection.
A Department of Justice probe into WorldCom was taken over on Wednesday by the US attorney in New York after the US attorney in Mississippi was taken off the case because he owned shares in the company.
Following the announcement about the dividend, shares of the MCI group tracking stock fell approximately 43 percent to close at 22 cents. WorldCom says it will discontinue the MCI group tracking stock on Friday, converting shares into WorldCom group common stock.
Reversing a recent promise that it would pay the MCI dividend, WorldCom said the refusal to pay the dividend, intended for Monday, was part of the company's larger effort to save money, which includes cutting 17,000 jobs and selling an unprofitable wireless business and non-core assets in Latin America.
WorldCom says it is in talks to secure $3 billion in funding, a reduction from the $5 billion it originally sought. The funding, combined with the cost-cutting measures, would help the company meet interest payments and could delay what many consider to be an inevitable bankruptcy.
While the company is investigating several options for restructuring, WorldCom said its plans for recovery could involve filing for bankruptcy protection.
A Department of Justice probe into WorldCom was taken over on Wednesday by the US attorney in New York after the US attorney in Mississippi was taken off the case because he owned shares in the company.
Following the announcement about the dividend, shares of the MCI group tracking stock fell approximately 43 percent to close at 22 cents. WorldCom says it will discontinue the MCI group tracking stock on Friday, converting shares into WorldCom group common stock.
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