April 30, 2001, Teligent CEO Mandl Is Expected To Announce His Resignation
By SHAWN YOUNG
Staff Reporter of THE WALL STREET JOURNAL
Teligent Inc. Chairman and Chief Executive Alex Mandl is expected to announce his resignation from the distressed Vienna, Va., telecommunications company Monday, according to people familiar with the former AT&T Corp. president and chief operating officer's plans. The 57-year-old executive, whose departure from AT&T for Teligent in 1996 startled the business world, doesn't have another job lined up yet, they added.
Mr. Mandl's departure comes as Teligent, once one of the most prominent of the so-called competitive local exchange carriers that compete with the regional Bells, appears to be changing hands as it deals with serious financial challenges.
Last week, Liberty Media Corp., the AT&T unit run by cable entrepreneur John Malone, transferred its 33.7% stake in Teligent to IDT Corp., a Newark, N.J., seller of calling cards and long-distance service. Terms of the deal between IDT and Liberty, which is based in Denver, weren't disclosed, but IDT executives took Liberty's three seats on Teligent's board. IDT is likely to appoint one of its own executives to the helm, a person familiar with IDT's plans said. Spokesmen at Teligent and IDT couldn't be reached for comment.
Mr. Mandl, who helped develop Teligent from little more than an idea in 1996 to one of the most prominent of the competitive local exchange carriers, had been thinking of resigning for several months, people close to the matter said. When IDT entered the picture, he told them he was willing to resign, and they accepted, the people said.
IDT is expected to file documents with the Securities and Exchange Commission as early as today that will shed more light on whether it plans to increase its hold on Teligent. The company has a strong balance sheet after selling a 32% stake in Net2Phone Inc., Hackensack, N.J., last year for $1.4 billion to investors that include Liberty Media and AT&T.
Teligent will be in violation of its debt covenants if it doesn't announce $350 million in additional financing Monday. It has only enough money left to get through the current second quarter. However, it is possible the company's creditors will extend the deadline.
Mr. Mandl said in a recent interview he had no regrets about leaving a post at AT&T that could have led him to be chairman and chief executive for Teligent, which uses wireless technology to transmit phone and data services to small and midsize businesses.
Mr. Mandl's high-profile name helped Teligent rise quickly to industry stardom. At its brief peak last spring, Teligent's stock hit $100 a share; it is now trading at well under $1. The company fell prey first to early technological glitches and then to a market that abruptly ceased to support big-spending, unprofitable telecommunications and technology upstarts.
IDT may be hoping to avoid bankruptcy court by making deals with Teligent's creditors, people familiar with the matter say, but they add that IDT could also be hoping to shepherd Teligent into a bankruptcy-court petition with a prenegotiated plan for it to emerge as a viable business rather than having it liquidated or splintered to satisfy creditors. Entering the picture at this late date could pay off handsomely for IDT if its gamble succeeds. Liberty, which owns about 10% of IDT, also could benefit indirectly.
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