May, 2002 : KPNQwest Low on Cash, Shares Could Have No Value
📅 - Pan-European data communications and Web hosting firm KPNQwest (kpnqwest.com) warned today that it was rapidly running out of cash, and said there "may be no underlying value" to its debt or equity securities.
"Under the present circumstances, without sufficient additional financial support from shareholders, strategic buyers or third party investors, KPNQwest is unable to draw further funds from the existing credit facility in order to meet its funding requirements for all of 2002," the company said in a release.
In late April, the company said it was re-examining its financial guidance and exploring alternative means of recapitalizing its balance sheet in light of deteriorating market conditions. Since then, the company said it has continued to experience deterioration in its liquidity position, in part due to the shaky alternative telecommunications market and partially because of the company's financial position and prospects.
"KPNQwest believes that, in light of its deteriorating financial position and prospects, the value of its debt and equity securities have been severely impaired and could face significant future impairment," the release said. "KPNQwest believes that there is substantial risk that there may be no underlying value to either its debt or equity securities."
KPNQwest was originally created in April 1999 as a joint venture between KPN, a Dutch telecommunications company, and Qwest Communications, a carrier based in the United States. Qwest released a statement following KPNQwest's announcement that said neither the company's customers nor revenues should be affected by KPNQwest's financial position.
"Under the present circumstances, without sufficient additional financial support from shareholders, strategic buyers or third party investors, KPNQwest is unable to draw further funds from the existing credit facility in order to meet its funding requirements for all of 2002," the company said in a release.
In late April, the company said it was re-examining its financial guidance and exploring alternative means of recapitalizing its balance sheet in light of deteriorating market conditions. Since then, the company said it has continued to experience deterioration in its liquidity position, in part due to the shaky alternative telecommunications market and partially because of the company's financial position and prospects.
"KPNQwest believes that, in light of its deteriorating financial position and prospects, the value of its debt and equity securities have been severely impaired and could face significant future impairment," the release said. "KPNQwest believes that there is substantial risk that there may be no underlying value to either its debt or equity securities."
KPNQwest was originally created in April 1999 as a joint venture between KPN, a Dutch telecommunications company, and Qwest Communications, a carrier based in the United States. Qwest released a statement following KPNQwest's announcement that said neither the company's customers nor revenues should be affected by KPNQwest's financial position.
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