Copyright 2002 / Los Angeles Times
Los Angeles Times…04/08/2002
From Times Wire Services
Metromedia Fiber Network Inc. said Sunday that Verizon Global Networks and Genuity Solutions terminated their fiber-optic agreements with the company.
In a news release, Metromedia said Verizon Global has paid $235 million under a $350 million contract to lease fiber-optic capacity.
Genuity Solutions already had paid $140 million of a similar contract worth $200 million. Officials at parent companies Verizon Communications Inc. and Genuity Inc. weren't immediately available to comment on the matter Sunday.
Metromedia said Verizon is "continuing to engage in discussions" concerning its relationship with the company.
Metromedia warned in mid-March that it may file for bankruptcy if it can't restructure its debt.
In October, it avoided a bankruptcy filing by securing $611 million in lender and vendor financing. The telecom company said March 18 that it may default on the $975 million of convertible notes it issued to Verizon Communications in March 2000.
Metromedia said it expects to begin negotiations with debt holders "shortly" regarding a consensual restructuring of its obligations.
The White Plains, N.Y.-based company moved a step closer to an expected bankruptcy filing April 1, when it announced that it defaulted on about $675 million in debt.
The defaults effectively dismantle the $611 million financing package arranged in October, as a missed payment on one part of the package led to defaults on the rest.