RealTime IT News

Genuity Pays Lenders $25M for Extension

Another deadline, another extension for Genuity .

The struggling Woburn, Mass., Internet services firm said its lenders have granted it another 30-day extension while the two sides continue to hammer out an agreement to restructure its debt.

In exchange, Genuity will pay $25 million to the consortium of banks that provided the company with a $2 billion line of credit.

"We hope to enter into agreements with our lenders as quickly as possible, and the extension reflects the value our lenders see in these discussions," said Paul R. Gudonis, Genuity chairman and CEO.

The move comes a little more than a month after Genuity paid $50 million for a previous extension.

Genuity was formerly the Internet division of GTE Corp. and spun out as part of GTE's merger with Bell Atlantic, now Verizon, in 2000.

Following the merger, Genuity spent millions of dollars on advertising and corporate sponsorship of golf tournaments and other events to raise the profile of the company and its Black Rocket service.

But as large customers delayed or canceled orders for IT infrastructure, Genuity suffered. Then Verizon decided not to reintegrate the company, which underlined the company's debt problem.

In other news, Genuity has been notified by the Nasdaq National Market that it has until Dec. 5 to meet share price and market value requirements or face delisting.