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PSINet Says Sayonara To Japanese Holdings

Bankrupt backbone carrier PSINet Inc. has completed the sale of all of the outstanding shares of PSINet Japan Inc. to Cable & Wireless IDC, Inc., for $16.6 million plus assumption of liablities. When PSINet first announced the deal last month, the Ashburn, Va.-based company said the selling price was $10.2 million.

The increase in the price results from Cable and Wireless bidding against another party at the court supervised auction process which forms part of the sale process under Chapter 11 of the U.S. Bankruptcy Code.

PSINet Japan provides IP connectivity and web hosting services for enterprise customers in Japan. The company has points of presence within key Japanese cities, a data centre in Tokyo and provides services to several thousand business customers.

In June, claiming total liabilities of $4.3 billion, PSINet Inc., the pioneering wholesale Internet service provider that went on an aggressive acquisition binge over the last four years, filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Included in the filing were 24 PSINet operating subsidiaries in the U.S.

At the time of the filing, the Ashburn, Va.-based PSINet had total assets of $2.2 billion. Of the $4.3 billion in liabilities, $2.9 billion was bond debt. The companies involved in the filings had approximately $300 million of unrestricted cash, cash equivalents, short-term investments and marketable securities on hand. The company believed this cash balance will provide sufficient financial resources to fully fund operations during the anticipated restructuring period.

PSINet is a provider of Internet and IT solutions offering hosting solutions and a full suite of Internet services through wholly owned PSINet subsidiaries.