XO restructuring hits snag
Forstmann Little officially tried to back out of its investment in XO Communications Tuesday, claiming the bankrupt carrier failed to meet conditions set forth in the $800 million restructuring deal the financial firm struck with XO last year.
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Forstmann Little sent a letter to the XO board Tuesday, rescinding its offer because it failed to meet at least four closing conditions, triggering contract clauses that no longer obligate Forstmann Little and partner TelMex to pay up.
XO Communications filed for bankruptcy last June, dragging Forstmann Little and TelMex with it. XO has maintained that it has met all conditions for the investment and expects to hold the two investors to the deal. But as a precautionary measure, XO filed a separate reorganization plan, which will hand the company over to its lenders in case the Forstmann deal falls through.
Forstmann and TelMex’s proposal would give 78% of the company to the pair in exchange for the $800 million investment.--Kevin Fitchard, staff writer.
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© 2012 Penton Media Inc.
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