WorldCom dives for Chapter 11 cover
No surprises there
Worldcom - which has rocked the corporate world with its $3.85 billion accounting scandal - has filed for Chapter 11 bankruptcy protection in the US.
The move gives WorldCom breathing space for the telcoms giant to carry on trading under protection from its creditors while it tries to sort out its self-inflicted financial mess.
In a statement issued yesterday WorldCom said it and most of its US subsidiaries filed for Chapter 11 Bankruptcy protection. WorldCom's non-US subsidiaries are not included in the filing and will continue to operate normally.
WorldCom also confirmed it had secured $2bn - on top of a $750m loan - to help finance the operation during its bankruptcy protection.
WorldCom plans to use the cash to continue operating its business while drawing up a new strategic plan for the company. Oh, and it also wants to use the cash to restructure its finances, reduce its debt burden and strengthen its balance sheet.
Said John Sidgmore, WorldCom's president and chief exec: "We will use this time under reorganisation to regain our financial health and focus, while operating with the highest integrity.
"Our total focus will be to take this company forward in the best way possible and with the highest ethics so that WorldCom can continue to be an important part of our economy," said Sidgmore.
If successful WorldCom plans to slip out from behind the protective cover of Chapter 11 over the next nine to 12 months. ®