Dec 31, 2001 : Globix in Bankruptcy Talks
📅 - Web hosting company Globix Corp. (globix.com) said Thursdaythat it is in bankruptcy talks with an informal committee of bondholders, anannouncement that sunk its shares 98 percent, to a record low of one penny.
Globix said the discussions include the company's plans for reorganizationthrough a bankruptcy proceeding designed to reduce the company's debt. Theinformal committee represents about 48 percent of the company's outstanding$600 million of 12.5 percent senior notes.
Globix, which reported that its Q4 net loss more than doubled to $73.6million compared to $30.1 million last year, said it is in similardiscussions with its preferred stockholders.
Following the announcement, shares fell to 1 cent, and Standard & Poor'sreduced its corporate credit and senior unsecured note rating on the companyto a double 'C' from a triple 'C,' Reuters reported.
Revenue of $25.0 million for the quarter ended Sept. 30 was slightly lowerthan the$25.9 million made last year. Globix said its results were affectedby a $3.5 million write-off of network assets hurt by the financialviability of a supplier, and a $4.0 million increase in bad debt expense.
"We do not believe we will meet the fiscal 2002 guidance previouslyprovided," said CEO Peter Herzig. "In light of ongoing discussions with ourbondholders, we expect to provide new guidance when we release our financialresults for the first quarter ended Dec. 31, 2001."
Globix said the discussions include the company's plans for reorganizationthrough a bankruptcy proceeding designed to reduce the company's debt. Theinformal committee represents about 48 percent of the company's outstanding$600 million of 12.5 percent senior notes.
Globix, which reported that its Q4 net loss more than doubled to $73.6million compared to $30.1 million last year, said it is in similardiscussions with its preferred stockholders.
Following the announcement, shares fell to 1 cent, and Standard & Poor'sreduced its corporate credit and senior unsecured note rating on the companyto a double 'C' from a triple 'C,' Reuters reported.
Revenue of $25.0 million for the quarter ended Sept. 30 was slightly lowerthan the$25.9 million made last year. Globix said its results were affectedby a $3.5 million write-off of network assets hurt by the financialviability of a supplier, and a $4.0 million increase in bad debt expense.
"We do not believe we will meet the fiscal 2002 guidance previouslyprovided," said CEO Peter Herzig. "In light of ongoing discussions with ourbondholders, we expect to provide new guidance when we release our financialresults for the first quarter ended Dec. 31, 2001."
Reads: 1903 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/globix1231.cfm
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