Report: Cable & Wireless Discussions Collapse

• By The WHIR, November 11, 2003

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November 11, 2003 -- (WEB HOST INDUSTRY REVIEW) -- Discussions over the sale of the U.S. Web hosting division of Cable & Wireless have collapsed and Simon Cunningham, chief executive of the U.S. operation, is returning to the UK, according to a report published by the Times last Friday.

Sources told The Web Host Industry Review on Thursday that the company was about to file for chapter 11 bankruptcy, but a source close to the discussions, while not denying the rumor, said a "potential" bankruptcy process would be used to unload underutilized office space as opposed to a liquidation of the business. The same source said the sale of the loss-making U.S. division was imminent and expected to be completed in the next two weeks.

Cable & Wireless has struggled to sell its U.S. operations since announcing in June that it was exiting the U.S. market amid heavy losses.

At the time of the June announcement, it was expected that the UK-based carrier would have difficulty find a buyer due in large part to its lengthy data center leases.

In early September, it was reported that the company had entered into discussions to sell the business, narrowing a list of six potential suitors down to two. The potential buyers were believed to be U.S. telecom operators and private venture capital groups.

Tags:  Cable & Wireless  Venture 

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