KPNQwest set to pull the plug

The liquidators of bankrupt Dutch telecommunications group KPNQwest said Friday that they would be forced to shut down Europe's largest data network in days, after a court ruled against them in a dispute with its lender banks.

"It (the shutdown) will be within a matter of days," KPNQwest administrator Ed Meijer told Reuters late Friday.

The administrators had sought to force the banks to turn over money collected from KPNQwest's clients to keep the network running as they seek to sell it and to give customers more time to find alternative providers. U.S. telecommunications giant AT&T was one of two companies close to making an offer for KPNQwest's network, Meijer said. "Certainly two of them are very close to making a final offer," he said. Asked if AT&T was one of them, he said: "Absolutely."

Bankruptcy prompted banks that had extended the company a $506.8 million credit line to grab most of its assets, including cash and receivables, and to demand a repayment of the 300 million euros ($291.26 million) already drawn by KPNQwest.

Earlier this month the administrators had collected cash to keep the 15,535-mile network running until the end of this month, but banks refused to release collected cash until the liquidators secure a repayment with collateral. KPNQwest clients range from regional Internet service providers with a few hundred customers to corporate giants including Dell Computer and Hewlett-Packard, plus America Online and Tiscali.

News source: ZDNet