Worldcom chief pooh-poohs financial distress

Everything's all right, it's fine...

Everything's all right, it's fine...

Worldcom's new CEO and president John Sidgmore has denied the company is facing bankruptcy. Sidgmore insisted reports on Worldcom's spiralling finances and customer attrition rates have been wildly misleading. In a conference call, Sidgmore said: "Right now the public perception of WorldCom and the private perception are at odds. Liquidity is not an issue for Worldcom today. We think we can service our future debt and expect to be in free cash flow by about $1bn this year." Michael Funk, equity analyst at Barclays Stock Brokers, said: "Sidgmore is trying to take the spotlight off Worldcom's finances. He thinks Wall Street has been too pessimistic on financial issues." As for reports that the business has been losing customers to its major US rival AT&T and smaller competitor Sprint, Sidgmore said: "It's not surprising AT&T and Sprint have been after our customers as we've been after theirs. We haven't seen any significant customer or prospect losses over recent months." He added: "This business is worth about $32bn in annual revenue and has 25m customers. This is not a dot-com that's on the edge. We have no question about the long-term strength of this company." Scott Sullivan, Worldcom's executive VP and CFO, said the business would definitely have a $5bn cash facility in place by the end of June and that $2.65bn of that would be used to repay some outstanding bank debts. Barclays' Funk added: "I don't believe the company will become insolvent but a more pessimistic person could say the business may be in financial trouble next year as its recovery and revenues are highly correlated to a recovery in the enterprise market. If that market doesn't recover in the third or fourth quarter this year, it could be bad."