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KPNQwest Files for Bankruptcy
ives writes "Today KPNQwest filed for bankruptcy. KPNQwest owns the most important fibre backbone in Europe. Apparently they are not planning on switching off their network, but without maintenance it will probably slowly degrade. The official press release can be found here."
in one last burst they should have the worlds largest lan party on it. largest as in it would be physically the size of the fibre network. if only for records sake.
I want 2D games back.
There's an in-depth article available in English from the German Heise.de newsticker. Read it here.
There's also a brief article on The Register available here.
Just thought I'd add a few tidbits since the news post doesn't actually link to any objective press coverage, company press releases are usually not the best way to inform oneself.
Switch back to Slashdot's D1 system.
http://www.cnn.com/2002/BUSINESS/05/31/kpnqwest/in dex.html
Where did you get that quote from about them not planning to switch it off? Here's a quote from the press release:
Since this is from their own press release, of course they don't just write "we'll stop operating," but that's pretty much what the above quote says they're expecting to happen.
If you look for some more neutral information than their own press release, you might be interested in this heise online article (yes, it's an English article).
Sig (appended to the end of comments I post, 54 chars)
Yes, Qwest is 47% owner of KPNQ. Probably won't have a noticeable effect on Q, as Q is having its own problems right now.
I'd have a personalized plate on my car, but "toxic bachelor" won't fit into 7 letters.
Some people have posted asking about how they're going to pay for keeping their network up, but that most likely isn't an issue, since you don't have to be *out* of money to file for bankruptcy. What they're trying to do by declaring bankruptcy is buy some time to find additional buyers. I'm not sure whether the rules in the EU are the same, but here's how it works in the US:
In the US, the two most common bankruptcy options are to file under Chapter 11 or Chapter 7 of the US bankruptcy code. Chapter 7 filings are what you do when you realize you've irrevocably screwed the pooch, and there's just no way you are ever going to make it. Ch. 7 means you've cashed your check, game over - your assets will be liquidated (sold) to scrounge up whatever cash possible for the companies you owe money to. Everybody goes home, then the earth is sown with salt under your company headquarters.
Chapter 11, however - this is what I presume they're using the European equivalent of - means you think you can turn things around, but you can't do it just yet or you can't do it because your existing debts are too big. You can declare a Ch. 11 bankruptcy when you've still got lots of cash - that's to keep things up and running while you work out a plan to pay back your existing debts.
There's a good side and a bad side for companies filing Ch. 11 - the good side is you get to keep on going, and you don't have to pay back any debts you ran up before you filed! Most of the time, courts will rule that the companies that provide you with critical services (like power, fiber, leases, etc.) can't shut you off during your bankruptcy, even though you've just (potentially) stiffed them for zillions of dollars. This is likely what KPN is doing.
The down side is that you no longer control your company - the courts do. And they pay lots of attention to what your creditors (those folks you stiffed) ask for. Your job is to come up with a plan to pay those creditors back over time for a reasonable amount (anywhere from 10% to 80% of your orginal debt, most likely). If your creditors don't like the plan, or think that they'd get more money back by shutting you down and liquidating assets than allowing you to live and try to pay them back, they can get the courts to probably shut you down. Also, don't forget that your credit is now hosed.
So ... I wouldn't worry about KPN's lights going off anytime soon. They probably filed the EU equivalent of Ch. 11 while they had plenty of cash in the bank to keep it running while they look for someone to buy their assets (probably the only chance they have of satisfying their creditors).
"95% of all Slashdot
Heise's summary in english.
Really, I'm not out to destroy Microsoft. That will just be a completely unintentional side effect. -- Linus Torvalds
Rumors are that maybe even the network will be shut down within the following days as it costs abour a million dollars per day to keep it running. But that's just a small part of the picture.
KPNQwest also operates a couple of data centres - and one of them is providing all technical facilities for hosting about a third of germany's web sites for Strato.
Strato is considering to either buy the affected data centre or to plan an alliance with Cisco, IBM, Microsoft and Cable&Wireless to provide new technical facilities for their hosting business.
Strato received quite some bad press when one of their storage units unexpectedly shut down last year and it took almost a week to have their websites up and running (breaking their 99% uptime guarantee) - so right now, competitors are ligning up to take their customers as it isn't clear if KPNQwest's network will be working over the weekend and what plans have been made to ensure the availability of the Strato-websites.
Why not?
A Euopean company just bought America's second largest beer brewing and distributing company?
In a Free Market, you should be able to buy whatever you want as long as you meet the terms the Regulators establish.
In a case of an American company buying a European backbone, they would have to meet the terms of both the EU and the US FCC and FTC.
Ah. I found the information. However, I cannot provide a direct link, because they use unique user ID's in the URL. You can find the article at silicon.com by clicking the bit about KPNQwest right at the front page and then checking on the "related articles". Here are the most important bits pasted:
Europe's largest fibre optic network operator, KPNQwest, is set to shut down its entire operations at 17.30 (BST) today after the collapse of rescue talks with potential buyers and banks.
The source said that employees in the UK office have been informed they will not be receiving any redundancy packages and are currently being instructed on how to appeal to the government to reclaim what they are owed.
A second source close to the situation confirmed the details. At 11:55 (BST), the source told silicon.com: "Try ringing any phone in the office in five minutes and you won't get an answer."
However, the article later states that
A spokesman from KPNQwest denied the allegation. He said: "That (network shutdown) is not happening today. The holding company KPNQwest NV has filed for bankruptcy as have five subsidiaries in the Netherlands. A number of other divisions of the company including the UK have filed for protection from creditors.
So, I probably should have tried to find the source article a bit more vigorously before posting...
KPNQwest is owned (most of it anyways) by the Dutch KPN (a formerly state-owned phone company) and the American Qwest. KPN and Qwest are both in deep trouble. Qwest has a debt of $2.4 billion dollars and its stock has tanked over the past year from a high near 40 to something like 4. For its part KPN stock has plummeted from a high around 60 less than two years ago to its current price around 5. KPN is weighed down by a $19 billion debt. With these kinds of parents it will come as no surprise that the KPNQwest joint venture in turn carries something like $1.8 billion debt.
It takes a lot of time to squeeze this kind of money out of customers. Most customers, and these customers' customers, simply don't have that kind of money, Could you afford to pay $300+ for cable?
But, the creditors, well, they have the money, but they don't really have the time. Not after the series of missed targets and setbacks that KPNQwest has gone through. For how long can you afford to lend a hundred million dollars?
I can't imagine the KPNQwest network infrastructure disappearing tomorrow, but this might be a chance for a big player to step in and consolidate its interests.