A day after the nation's
largest-ever Chapter 11 filing,
assured investors that customers are sticking around and that the big telco aims to emerge largely intact from bankruptcy within a year.
WorldCom chief John Sidgmore said at a Monday morning press conference that the company is intent on holding on to its core assets and that its current financing plan is sufficient to last through the year. Though the bankruptcy filing almost surely wipes out the value of the company's common stock, WorldCom shares rallied 3 cents, to 12 cents Monday morning.
Since its accounting bombshell last month, WorldCom has been the target of ample speculation regarding whether its lucrative corporate data customers would flee to competitors such as
. But Sidgmore said the company is in many ways in a stronger position now than it has been recently.
"We still haven't lost any substantial customers -- not seen any kind of mass exodus," the CEO said. "Now in a strange way, in Chapter 11 ... we can be more certain about where we are headed. I feel like we have a better chance to get our message across."
Sidgmore said he didn't want to downplay the matter but said he felt his hands were tied and that investors were influenced by uncertainty. He also confirmed that the company sought protection from creditors because it had run out of cash.
"Vendors were accelerating payment requests on us," the executive said. "That's why we had to file at this time."
WorldCom sought Chapter 11 protection Sunday as the debt-ridden telco ran out of cash. By filing for protection from its creditor, WorldCom will be able to avoid some $2 billion in interest payments this year alone; the company had some $32 billion in debt and preferred stock outstanding.
On confirming Sunday evening its widely expected bankruptcy filing, the company quickly signed up with the GE Capital, J.P. Morgan and Citigroup for a new $2 billion loan.
Sidgmore also reiterated his stance that the company won't be parting with its core assets, such as the UUNet Internet backbone outfit, the consumer and business long-distance phone operations and the business data arm. "Reorganization isn't going to be a liquidation, in my opinion," said Sidgmore.
Sidgmore said the $750 million in financing that the company has access to via a debtor-in-possession facility should be enough to get it through the year. Sidgmore also expects the company's restructuring to take nine to 12 months -- an unusually brief time considering the complexity of the massive company.
The company also said at the conference that it wouldn't report earnings as scheduled Thursday. WorldCom offered no indication of when it might update its financials.