DJ PSINet/Assets -2: Foreign Telecom Cos Possible Buyers
19 Mar 17:13
Baird & Co. analyst Renouard said Sprint is a possible buyer, considering its
interest in getting more heavily into Web hosting.
A foreign telecommunications company might also be interested, such as
Deutsche Telecom AG (DT) or France Telecom (FTE), he said.
But Renouard and others said it's hard to tell how much PSINet's network and
Web hosting businesses are worth, although it's clearly a buyer's market, they
said.
"The only thing we know is all of it, collectively, is worth less than the
debt on the books," he said.
PSINet has about $3.6 billion in debt and $1 billion in preferred stock,
Renouard said.
He estimated the company could fetch perhaps $1.8 billion from asset sales,
leaving preferred shareholders getting nothing. But he and others said it's
increasingly unlikely a buyer will emerge for PSINet assets in the absence of a
bankruptcy filing.
"I think they can sell assets, but the bulk of what will have to happen is
some formalized restructuring," said A.G. Edwards analyst Gieber, who cut his
rating on PSINet to sell from reduce.
PSINet said Monday it had hired Dresdner Kleinworth Wasserstein to begin
talks with bondholders and explore debt-restructuring options as Goldman Sachs
& Co. continued its efforts to identify strategic alternatives, including a
sale.
Analysts blamed the company's woes on an aggressive acquisition program and
poor management decisions.
"They basically buried themselves in debt," Renouard said.
The slowdown in the telecommunications industry has exacerbated PSINet's
problems as potential buyers digest previous acquisitions and deal with their
own problems, analysts said.
-By Mary Ellen Lloyd, Dow Jones Newswires; 704-371-4033;
maryellen.lloyd@dowjones.com
(END) DOW JONES NEWS 03-19-01
05:13 PM |
