XO, Icahn spar over restructuring

XO Communications’ path to refinancing has hit another hurdle in the shape of financier Carl Icahn.

In a prepared statement Thursday, Icahn said he was against the plan because it was not “materially” better than a previous proposal. Under a plan announced in November, Forstmann Little and Telefonos de Mexico said they would invest $800 million into XO as part of restructuring that would avoid a bankruptcy filing. As part of the plan, XO shareholders would get nothing.

Icahn said he has been contacted by two other bondholders who are against the plan. Together, the three own about 20% of XO’s bonds. Separately, an internal XO memo claims the company will file Chapter 11 by March 15, according to a report from web site Dotcom Scoop.

XO, in a statement released this morning, said it was going forward with its restructuring plan and doesn’t foresee filing Chapter 11. Additionally, neither Icahn nor anyone else has come up with an alternative funding plan.

According to the statement: “To date, XO has not received any alternative funding or restructuring proposals from any other party, despite the aggressive marketing of the investment opportunity to a wide variety of financial and strategic investors during the last several months by Lokey Howard & Zukin, the investment banking firm hired to assist XO in its efforts to secure necessary funding.”--Vince Vittore, Executive Editor