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Technology Stocks : IDT *(idtc) following this new issue?* -- Ignore unavailable to you. Want to Upgrade?

To: Hawaii60 who wrote (23570)	4/26/2001 4:29:37 PM
From: Arrow Hd.	Respond to of 30916

FYI In what may be an attempt to shelter a huge gain on the sale of its stake in Net2Phone Inc. {NTOP, News, Boards}, the mercurial telecom company IDT Corp. {IDT, News, Boards} is trying to take control of just about bankrupt fixed wireless company Teligent Inc. {TGNT, News, Boards}. In a government filing this morning, Teligent says that three men -- all executive officers of IDT -- have been elected to its board of directors after being nominated by Liberty Media Group {LMG/A, News, Boards}. Liberty Media and its chief John Malone controlled about 31 percent of Teligent's equity, or roughly 21.5 million Class A shares. But, while IDT will not comment, industry sources tell me that IDT has purchased that stake from Liberty for an undisclosed sum. IDT is also believed to be trying to purchase an equity stake controlled by private equity firm Hicks, Muse, Tate & Furst Inc., so that it can be in a position to take control of two more Teligent board seats and take control of the company. IDT is expected to make a 13D filing early next week in order to make all of its intentions clear. For now, those intentions remain somewhat hard to figure. But, one may be to seize Teligent and a $556 million net operating loss carry-forward on its balance sheet, which IDT could potentially use to shelter over a billion in gains from the sale of its stake in Net2Phone at AT&T Corp. {T, News, Boards}. Liberty owns 10% of IDT and John Malone is close with IDT's chairman Howard Jonas. Both men are incredibly inventive when it comes to financial restructurings and avoiding taxes. If Teligent's tax loss carry-forward is why IDT is interested, it would be because it can help IDT avoid taxes. But it would appear that in order to preserve the carry-forward, IDT would have to keep Teligent out of bankruptcy -- something that may prove very hard to do. On April 30th, the company must receive a waiver from its banks for a covenant it has violated under its borrowing agreements. It is far from clear Teligent will get that waiver, and unlikely that IDT will be able to move fast enough to take control of the board before then. Teligent's share price is currently less than $0.60. Its bonds are trading at an unbelievable quarter of one cent on the dollar and its bank debt is offered at 16 cents on the dollar. Almost everyone with knowledge of the company expects it will soon be forced to file for bankruptcy. The company says it is still pursuing financing alternatives; it's not expected to be successful. Beyond the April 30th deadline looms a coupon payment on its bonds that no one expects it will be able to make. IDT may be willing to risk some cash now to get a seat at the table before Teligent tangles with its debt holders, hoping that it can convince the banks to offer the waiver and then buying some time to figure out if it wants to do anything. If IDT can succeed in gaining control of Teligent's board, it would also have the exclusive right to file a plan of reorganization in bankruptcy for at least 90 days following a Chapter 11 filing. Teligent's fixed wireless system may not be making any money, but it is working and it is thought to have some value.