IDT ready to make £3bn offer for WorldCom's best assets
In the first hint of a breakup of WorldCom, the telecommunications and internet company IDT has offered $5bn (£3bn) for two of the former's prize assets – the long distance phone company MCI and WorldCom's local phone network MFS.
A WorldCom spokesman yesterday seemed to rule out such a deal, 24 hours after John Sidgmore, its new chief executive, pleaded for patience and understanding as it tried to rebuild after the shattering revelation of almost $4bn of expenses falsely booked as investments. "It is highly unlikely we would consider selling any of our core businesses," the spokesman said.
WorldCom may have no choice, as it struggles to avoid a Chapter 11 bankruptcy filing, and searches to repay an estimated $30bn debt. A sign of how far and fast the telecommunications sector has fallen is the comparison between the $5bn offered by IDT and the $37bn in stock paid in 1997 by Bernard Ebbers, WorldCom's disgraced former chief. Mr Sidgmore claimed his company had more than $2bn of cash in hand and is in no immediate danger of running out of money. But he could give no assurance that bankruptcy could be avoided.
As the financial scramble around WorldCom intensified, so did the pace of judicial investigations, with reports that a key figure in the accounting débâcle has agreed to co-operate with prosecutors.
Investigators believe that with the help of Cynthia Cooper, the internal auditor who uncovered the alleged $4bn fraud, it may be easier to bring criminal charges against former senior WorldCom executives such as Mr Ebbers and its former chief financial officer, Scott Sullivan. According to the Wall Street Journal yesterday, Ms Cooper told prosecutors WorldCom executives tried to stall her inquiry.
Meanwhile, a judge has appointed Richard Breeden, a former head of the watchdog Securities and Exchange Commission, to act as "corporate monitor" for WorldCom, with instructions to look into "every nook and cranny".
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