PSINet Inc. is hiring the investment banking firm of Goldman Sachs & Co. as its financial advisor to assist PSINet in analyzing and considering various financial alternatives available to it as well as exploring other strategic considerations for improving shareholder value, which could include, among other things, a strategic alliance or the possible sale of all or a portion of PSINet.

The move comes after the Ashburn, Va.-based Internet carrier announced on Nov. 2 improving revenues but a widening loss for the third quarter. In the wake of the disappointing performance, PSINet implemented a new organizational structure, began reducing capital expenditures by $100-200 million, and began considering discontinuing certain operations.

As of part of the reorganization, Harold S. "Pete" Williams resigned as president and chief operating officer. In addition, the company said it expected fourth quarter losses to be greater than expected.

PSINet announced also that its board of directors has formed a special committee chaired by an independent director, Ralph J. Swett, to review and consider these alternatives and to coordinate the engagement of Goldman Sachs.

"PSINet is pleased to retain Goldman Sachs as its financial advisor," said William L. Schrader, chairman and chief executive officer of PSINet. "We have taken a number of steps to position the company as the Internet Super Carrier. With our valuable fiber and hosting center assets, our newly organized management team, and the assistance of Goldman Sachs in helping us through our current financial challenges, we believe that we are well positioned to move forward in executing on our business plan. We remain committed to maximizing shareholder value and believe that a review of all our options as we move forward is appropriate."

The company offers global e-commerce infrastructure, end-to-end IT solutions and a suite of retail and wholesale Internet services through wholly-owned PSINet subsidiaries. Services are provided on PSINet-owned and operated fiber, satellite, web hosting and switching facilities, providing direct access in more than 900 metropolitan areas in 28 countries on five continents.

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