Is the End Near for ICG?
Page 1 of 1
One week after ICG Communications Inc.'s executive foundation crumbled, the CLEC appointed Randall E. Curran as chief executive officer of ICG, making him the third skipper to try his hand at running the company this year.
Curran, who most recently served as chairman, president and CEO of Thermadyne Holdings Corp., succeeds Carl E. Vogel, who resigned last week as chairman and chief executive officer. Joining Vogel in the exodus were fellow board members Gary S. Howard and Thomas O. Hicks.
Curran may have quite a load to carry. The three executive who fled last week did so mere hours after the firm's pledge to overhaul its business plan to compensate for network outages and dismal sales.
Curran will have to deal with the following situation: major customers said they would withdraw as ICG clientele, or at the least, slow their service orders, if the turmoil was not resolved. In fact, customers have been a lot more proactive than that as class action suits have been filed against the firm.
stock, which opened at about 59 cents a share and is down overall about 95 percent since last year. In a breakdown of the struggling phenomenon of CLEC's, CNBC Tuesday said the firm's cash flow, once projected at $140 million, has now shriveled to about $20 million.
Public Relations Specialist Silvia McLachlan told InternetNews.com Wednesday she could neither confirm nor deny ICG's plight. She said nobody has talked filing for bankruptcy to her knowledge.
"Everybody is concentrating and keeping focused on what they're doing," McLachlan said.
Even the firm's investors, Liberty Media Corp. and buyout firm Hicks, Muse, Tate & Furst Inc., couldn't save the firm after their brokered talks to merge with Teligent fell through.
Vultures are circling. ICG said it has engaged Wasserstein Perella & Co. as an independent financial advisor and Zolfo Cooper, LLC, which specializes in company turnarounds and restructuring, to assist Curran. These firms, together with ICG's existing financial advisor Gleacher & Co. will try to turn the ship around.
Gleacher & Co. Managing Director John Huwiler refused to comment Wednesday afternoon.
Now it could be just a matter of time before communications giants look to scoop up the wounded outfit.
Yankee Group's Joanna Makris, program manager of Communications Services for the New Economy, said acquisition is a definite possibility, but declined to say exactly who is interested.
"There are serious concerns. It signals a harbinger of doom for voice-oriented CLEC's who haven't turned around," Makris said.
Makris said firms looking to build out their dials assets would make ICG very attractive. She also said that despite a litany of disgruntled customers, many of the major Internet service providers have been appreciative of ICG's service.