NorthPoint sells Canadian assets

(Telephony) On the eve of the Nasdaq stock market delisting process, NorthPoint Communications announced that it has sold its 50% stake in NorthPoint Canada Communications, the last of its foreign investments.

The sale was made to its partner in the venture, Call-Net Enterprises, for approximately $5.3 million and is intended to extend NorthPoint’s viability. A company spokesman declined to say what kind of a return NorthPoint was getting on its original investment or how long this money will last.

NorthPoint Canada, which offers DSL service to businesses in that country, was formed in February of last year with investments of undisclosed amounts from both NorthPoint and Call-Net. The venture currently offers DSL in four markets through 56 Central offices.

The sale comes a month and a half after Verizon pulled out of its planned acquisition of NorthPoint, an act that sent the company’s stock below $0.60 and that Liz Fetter, NorthPoint CEO, in a statement called a “crippling blow.” NorthPoint has since filed suit against Verizon for violating the merger agreement.

According to a NorthPoint spokesman, this move, along with last month’s sale of VersaTel, the company’s European joint venture, allows the company to concentrate on its domestic business.

“This is all a part of what we’ve been talking about for the last six weeks since Verizon pulled out of the merger agreement…It puts some additional money into our coffers so we’re a little bit lighter and more nimble moving forward,” he said.

Even if NorthPoint is able to recover through its scaled-down business plan, hard times are approaching, with NorthPoint’s status as a publicly traded company in doubt.

If NorthPoint fails to trade at or above $1 tomorrow, the company will have reached 30 consecutive business days of trading below that price. If this occurs, NorthPoint will then be given 90 calendar days to achieve the $1 threshold for 10 consecutive business days. If the company fails to do so and barring appeals, NorthPoint will then be delisted from the Nasdaq Stock Market.