Oct 26, 2001 : Exodus Restructures European Operations

📅 October 26, 2001 - Exodus Communications, Inc. announced actions that affect a limited number of its European operations as part of the company's overall plan of reorganization to provide a suitable capital structure for long-term growth and profitability.

On September 26, Exodus filed voluntary petitions for reorganization underChapter 11 of the U.S. Bankruptcy Code in the United States. The filingincluded the company's domestic operations headquartered in Santa Clara,Calif. and certain other domestic subsidiaries. In conjunction, the companyreceived a commitment for up to $200 million in debtor-in-possession (DIP)financing from GE Capital that will be used to fund post-petition operatingexpenses and supplier and employee obligations.
Yesterday, Exodus announced it is liquidating four non-operationalfacilities, one each in Munich and Amsterdam, and two in Dublin. None of thefacilities is functioning currently, and no customers or employees areaffected by the liquidations.
Exodus also has filed for reorganization of its entity in Amsterdam, whichwill provide protection from creditors and allow for uninterruptedoperations as the company provides service to customers and meets itsobligations to customers and employees.
"Exodus remains committed to serving the global marketplace," said L.William Krause, Exodus Chairman and Chief Executive Officer. "Ourrestructuring actions, both in the U.S. and internationally, are designed toensure that we have the wherewithal to do that. In assessing ourinternational operations, cost structure and potential for profitablegrowth, it became clear that we were over-invested in non-operational orunder-utilized facilities in certain markets. To continue these entities, orto fail to provide adequate protection to help ensure uninterrupted serviceto our customers, would be inconsistent with our restructuring plans, andwith managing Exodus to profitability."
Exodus has international operations in Frankfurt, London, Paris, Melbourne,Sydney, Hong Kong, Tokyo and Toronto. These operations are unaffected by theplans announced and continue business as usual.
Exodus, as a market leader in complex Web hosting and Internet operationsoutsourcing services, enjoyed first-mover status in its category, buildingone of the world's largest privately-managed data networks and locatingdozens of state-of-the-art Internet Data Centers (IDCs) in more high-demandlocations than any other hosting service provider.
"In the past, we sacrificed profitability in exchange for growth and marketshare, over-expanding in some areas in advance of demand, and notanticipating the decline as the dot.com bubble burst and the economyweakened," Krause said. "Our top priority now is to serve our existingcustomers, better than ever, so they entrust us with more of their business.Our goal is to run a profitable business without sacrificing any of theunique value we bring to customers and the marketplace."