Jul 8, 2001 : Level 3 Says Funds Will Last Into 2004

📅 July 8, 2001 - Communications firm Level 3 said Friday it had enough funds to last into 2004, disputing a previous article that ran on Bloomberg.com suggesting the company was nearing bankruptcy.
"The company believes that the combination of available cash and future revenues provides sufficient funds to achieve free cash flow breakeven, projected to occur at the beginning of 2004," the company said in a release.
The announcement came after Level 3 was listed as one of three companies that might "be the next telecommunications firms to file for bankruptcy - at least if their junk bonds are any guide," according to an article published Friday on investor site Bloomberg.com.
"Bonds of all three companies have fallen to below 50 cents on the dollar - levels in line with debt of some firms that have since filed for protection from creditors," the article said. "The drop suggests investors see these loss-ridden, lower-rated companies as increasingly unlikely to keep up scheduled bond payments."
Level 3 immediately issued a statement refuting the article, saying the failed to mention a number of important facts.
"The current market volatility in the telecommunications industry may continue to affect Level 3's stock and bond prices. However, the company believes that, at current levels, they do not accurately reflect Level 3's future prospects or the underlying value of its assets."
Level 3 said it had about $4.5 billion in cash and available liquidity as of the end of the first quarter of 2001. The company also predicted cash revenues of $2.1 billion for the year 2001, with $657 million having already been collected in the first quarter.