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KPNQwest says debt, equity securities may be valueless; no longer able to draw on bank line
New York, May 15 - KPNQwest NV said the value of its debt and equity securities has been "severely impaired" and could deteriorate further, creating a "substantial risk" that both debt and equity securities have no value at all.
In addition, the Hoofdoorp, Netherlands telecommunications company said it is no longer able to draw on its credit facility in order to meet its funding needs for 2002.
As previously announced, KPNQwest is examining alternatives to recapitalize its balance sheet. It has hired Bear, Stearns & Co. Inc. and Banc of America Securities Ltd. to advise.
The company said it has not yet reached an agreement but since April 24 it has suffered "a continued deterioration in its liquidity position."
KPNQwest said it has been evaluating its resources and funds potentially available to determine whether they would be sufficient to meet all its obligations, including its bonds, or to complete a recapitalization transaction.
The company also said it has started discussions with its credit facility lenders about the preliminary results of its review of recapitalization alternatives and its current financial condition and prospects.
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