A day after it cut nearly half its workforce, 360networks filed for protection from creditors in Canada and the United States. It also is taking "appropriate action" to protect its assets in other jurisdictions, including initiating solvency proceedings for some of its European subsidiaries, it says.
360networks says it and several operating subsidiaries filed under the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia. At the same time, its U.S. subsidiary, 360networks Inc. and 22 affiliates filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York.
The company says it has $155 million in unrestricted cash, cash equivalents, short-term investments and marketable securities, which will fund service to existing customers in North America and complete segments of its network there, it says.
The company has $1.2 billion in senior secured bank debt and $1.45 billion in unsecured senior notes. It says in a statement it can complete its North American network with its cash and backlog of contracts, but growth will depend on its ability to attract investors. The company says it has considering several financing proposals.
360networks spokeswoman Michelle Gagne says the company will not complete its network project in areas other than North America and would not disclose any potential investors. "If there is an investment, we will make an announcement," she says.
The company hasn't decided which assets it may sell, she adds.
Prior to the filings, seven of the company's board members resigned, 360networks reports. Gagne would not speculate on why they resigned or on future developments. "As soon as we have an update, we will make an announcement," she says.