XO's Fate Uncertain
XO Communications has until Sept. 15 to satisfy terms of an $800 million buyout offer from Forstmann Little and Telefonos de Mexico, after a federal judge last week approved the investors' reorganization plan for XO. But the buyout group could still back out of the deal and has said it doubts XO can meet its conditions.
XO, which owns a fiber-optic network and provides Internet and telecommunications services, filed for Chapter 11 bankruptcy protection in June. The proposed buyout offer calls for Forstmann Little, which has already invested $1.5 billion in XO, and Telefonos de Mexico to invest an additional $800 million in the company for an 80% stake. But the companies have said they doubt that XO, which was founded by cellular-phone pioneer Craig McCaw, can meet financial targets and other conditions of the agreement.
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Meanwhile, financier Carl Icahn last week purchased almost all of XO's nearly $1 billion in bank debt, which would give him an important role in the restructured company.