Broadwing Inc. plans to take non-cash, pre-tax asset impairment charge of approximately $2 billion for Q4 2002 to write-down the value of its broadband unit, Broadwing Communications. Broadwing said it has directed its financial advisors, Lehman Brothers and Banc of America Securities, to consider strategic alternatives for the company, including the possible sale of Broadwing Communications' operating assets. The company noted progress in other areas of its ongoing financial restructuring, including securing a financing commitment of $350 million through Goldman Sachs; amendments to existing credit facilities; and reiteration of previously provided guidance to revenues, EBITDA and capital expenditures.
http://www.broadwing.com
- Broadwing Inc. is comprised of Broadwing Communications and Cincinnati Bell.
Broadwing Communications operates a nationwide, 18,500 mile all-optical switched network based on Corvis' long-haul platform and CIENA's CoreDirector optical switching systems.
On 29-October-2002, Broadwing announced a major restructuring of its Broadwing Communications unit aimed at reducing expenses by approximately $200 million annually. The restructuring targets line cost reductions of 25% over the next six months through network grooming, optimization, and rate negotiations; consolidating the unit's workforce by 500 positions; and also calls for exiting its wholesale international voice business. During Q3, Broadwing Communications recorded revenue of $296 million, a decline of 3% from Q3 2001. The company noted solid growth in sales to up-market enterprise customers, while citing the prolonged erosion in the carrier market as responsible for the revenue and EBITDA decline. Moving forward, Broadwing Communications had planned to focus its sales efforts on large enterprise accounts.
In September 2002, Broadwing named Kevin W. Mooney to serve as CEO to succeed Richard G. Ellenberger, who left the company. Mooney had served as Broadwing's COO for the past year and previously as the company's CFO.
