PSINet sells the kitchen sink to pay off creditors

All assets up for sale as the end nears for the once mighty ISP

Bankrupt ISP PSINet has put all its assets up for sale in an attempt to pay off some of its outstanding $4bn debt. The company hopes to raise between $452m and $472m to appease its most demanding creditors. An additional $100m could be recovered from the liquidation of its consulting operation, Metamor Worldwide. Despite needing another $3.5bn to cover the debts, PSINet's CFO, Larry Hyatt, remains optimistic, claiming the company has managed to salvage more than most other bankrupt internet companies. PSINet filed for Chapter 11 protection last June. The company was hit hard by the general downturn in the market and its situation was exacerbated by the loss of several lucrative contracts, including its deal with Cable & Wireless. According to documents filed at a district court in New York, the proceeds of the asset sale will enable the company to pay the amount owed to its suppliers and equipment lenders, as well as various fees and taxes. However, unsecured creditors are only likely to receive 10 per cent of the total they loaned to the ISP. PSINet has already started to close operations. It's in the process of shutting its corporate campus at George Washington University, and sold its customer base, backbone network and associated equipment and intellectual property rights for only $10m to Cogent Communication earlier this month. Further funds were raised through the sale of its Japanese operations to Cable & Wireless and its Canadian business to Telus. The bankruptcy court has scheduled a hearing for 13 June to map out its plans for liquidation. Once this process is completed and all assets have been sold PSINet will file a final report to the court and cease operating. At the height of its success, PSINet employed more than 9,000 people and set a record share price of $60 share in March 2000. For related news, see
Cable & Wireless snaps up PSINet Japan
http://www.silicon.com/a49849
Internet service provider in profit shocker
http://www.silicon.com/a46009
PSINet gets ultimatum from C&W
http://www.silicon.com/a44930
PSINet files for chapter 11
http://www.silicon.com/a44825
PSINet dubs its own stock 'worthless'
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