The broadband network service provider, 360networks, which opened a cable landing station in Dublin last October to connect Ireland to North America and Europe, may be forced to file for bankruptcy. The Canadian company missed a $10.9 million (€12.7 million) bond-interest payment on Friday and is seeking to restructure its operations in the face of a failure to raise new financing. It has 30 days before it will be technically in default on its $175 million bond issue and must raise $300 million in 10 weeks to continue building its $7-billion network.
Bankruptcy would make the young Vancouver, British Columbia-based provider one of the first casualties among the companies which began competing fiercely in the late 1990s to build networks of global fibre-optic communications.
Yesterday 360networks said it had abandoned plans to buy Internet service provider NetRail of Atlanta, which has a 40,000-kilometre fibre-optic network across the US, while Argentina's Impsat Fiber Networks said it cancelled contracts to use 360networks' fibre-optic cable and maintenance services in Argentina and Brazil.
The company has other contracts with 360networks that have not been cancelled, spokeswoman Ms Kathleen Purcell said in New York.
Shares in 360Networks have fallen 97 per cent since February 20th when it said it planned to buy NetRail for an undisclosed amount of stock.
When the company went public in April 2000 it immediately acquired a market value of $20.6 billion. Its shares have fallen from a $24 dollar high last year to a few cents. After failing to make a $10.9million interest payment on corporate bonds on Friday, 360networks announced that it had contracted Lazard Freres to consider options, including restructuring.
In a statement 360networks said it did not make the payment to preserve cash as it reviews its options. Since discussions with potential creditors have not been successfully concluded, the company is now concentrating on alternatives, including restructuring.
360networks opened a $70 million cable landing station in Clonshaugh Industrial Estate in Dublin to connect Ireland to North America and Europe via a 12,200 km undersea fibre optic cable.
Last month the company abandoned plans to build an undersea fibre-optic link connecting North America to Asia, opting instead to acquire telecommunications capacity. In a report in May it said it still intended to have a global network of 65,000 route miles linking North America to Europe and South America by the end of the year. It is currently building a $7 billion network linking cities such as Toronto and Los Angeles.
