PSINet inks Chilean deal

Chipping away at its $4 billion debt as it looks to restructure operations, PSINet today announced a buyer for its Chilean operations and facilities. Terms of the deal were not disclosed.

The now bankrupt Internet-hosting and Web service provider signed a definitive share-purchase agreement with iLatin Holdings and other investors. The deal comes just one week after PSINet announced a similar deal in which an investment group and others signed a letter of intent to purchase subsidiaries in Argentina, Brazil, Mexico and Uruguay.

As with its other Latin American concerns, the Chilean subsidiaries were not part of PSINet’s recent Chapter 11 filing, which included U.S. and Canadian operations only. All of the Latin American deals are subject to regulatory and bankruptcy body approval.

In a statement, the company said it, “expects that its operations in Chile will continue to operate in the normal course of business.”

Despite reaching the Latin American deals, at least one analyst says the asset sales are exercises in futility.

“It often feels to me they’re shoveling water out of boat with a lot of holes,” said Counse Broders, senior analyst for Internet services at Current Analysis. “Unfortunately when you start getting the bad news flowing it just doesn’t seem to stop.”