Qwest Restatement Could Raise Creditor Worries

A possible Qwest (Q Quote) decision to restate as much as $1 billion in 2001 revenue could earn it points with accounting investigators -- but it also could jeopardize the company's status with creditors.

New CEO Richard Notebaert is considering the possibility of erasing $1 billion in revenue, most likely related to the sales of network capacity to other telcos, according to a report in Friday's Wall Street Journal Online.

If Qwest goes ahead with the move, it won't come as a surprise to telecom industry observers, and it could signal to government officials that new management at Qwest is eager to cooperate. But such a move could look to bankers like fresh evidence that the cash-strapped telco was never as creditworthy as they thought, putting the company in further peril as it seeks to conduct asset sales to bolster its balance sheet. ...