Not good for PSIX holders
mad2
March 19, 2001
--------------------------------------------------------------------------------
PSINet Shares Plunge as Company
Warns Stock May Be Worthless
A WSJ.COM News Roundup
ASHBURN, Va. -- PSINet Inc. shares plunged after the struggling Internet provider said it is "likely" its stock will be worthless even if it finds an acquirer and restructures its debt.
In midday trading Monday on the Nasdaq Stock Market, shares of PSINet dropped 50 cents, or 70%, to 22 cents -- a new all-time low.
PSINet Agrees to Sell Transactions Unit to Investment Group for $300 Million (March 13)
The bleak outlook came as PSINet named Harry G. Hobbs president and chief operating officer, filling a position left vacant since last year, and said it has hired Dresdner Kleinworth Wasserstein to explore debt-restructuring alternatives.
Mr. Hobbs, currently an executive vice president and president of international operations, succeeds Harold S. Wills, who resigned last November. Since that time, Mr. Hobbs, 47 years old, has shared Mr. Wills' responsibilities with James F. Cragg, president of North American operations.
Mr. Cragg has resigned from PSINet, the Internet-service provider said Monday in a statement.
Mr. Hobbs will be responsible for all global PSINet operations and will report directly to Chairman and Chief Executive William L. Schrader.
PSINet said Dresdner Kleinwort Wasserstein will help the company explore ways it can restructure its obligations to bondholders and other creditors. The company last week said that if it didn't resolve certain of these obligations it could default on its debt securities.
Dresdner Kleinwort Wasserstein's activities are being conducted in conjunction with the activities of Goldman Sachs & Co., which PSINet hired last November to identify strategic alternatives, including the sale of noncore businesses and a possible sale or merger of the company.
PSINet said that even if it is successful in restructuring its obligations or completing an acquisition or asset sale, it is "likely" that its common stock "will have no value," and the indebtedness of the company will be worth "significantly less" than face value.
Meanwhile, PSINet on Monday said its French unit Metamor Holdings agreed to sell its majority stake in France's Decan Groupe to Getronics International BV for about 58.5 million euros ($52.5 million).
Because of adjustments and an escrow, Metamor, which owns more than 98% of the ordinary shares of Decan and 99% of its convertible bonds, will reap about 33.5 million euros in proceeds from the deal. Metamor and Getronics expect to close the transaction within the next few weeks, subject to customary closing conditions.
Decan provides information communications and technology services.
PSINet has been looking to raise cash through asset sales. Last week the company agreed to sell its PSINet Transaction Solutions to an investment group led by GTCR Golder Rauner LLC for $300 million.
Also last week, PSINet completed the sale of PSINet Global Solutions, a unit of PSINet Consulting Solutions that provides systems maintenance and application development from technology centers in the U.S. and India. |
