WorldCom aims 'to avoid bankruptcy'

12 April 2012

WORLDCOM is 'working with the banks to avoid bankruptcy', chief executive John Sidgmore revealed. He pledged to 'investigate every past transgression' at the troubled telecoms group after a meeting with the Securities and Exchange Commission. The probe already extends back to 1999.

The group, which revealed a £2.5bn fraud last week, has £1.3bn cash and hopes it will have a loan restructuring proposal by the weekend. But it cannot rule out 'some form of bankruptcy', Sidgmore admitted. Brokers think it will seek Chapter 11 bankruptcy protection.

Customers are staying loyal, but problems are piling up. The New York State pension fund filed what may be the first of many lawsuits against WorldCom and auditors Arthur Andersen. The fund has lost £200m - the biggest loss in its history.

WorldCom is a big supplier to the US military, but Defence Secretary Donald Rumsfeld said its troubles would not pose a problem.

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