PSINet prepares for bankruptcy struggle

The largest independent ISP in the US has been struggling since the beginning of the year and last month dubbed its stock worthless. The annual results, released yesterday, merely confirmed the gravity of the situation.

A statement said the company and its advisors continue to "analyse and pursue" financial and strategic alternatives. But it warned: "Even if one or more of these alternatives can be successfully implemented, there can be no assurance that the company will not run out of cash."

PSINet also warned that it had received notices of default from equipment lessors over $68.1m in leases. It said that action by any of its creditors could trigger demands for repayment of almost all of its $3.7bn in debt.

It said that any efforts to keep the company afloat were "likely to involve reorganisation under the federal bankruptcy code".

The company had $520m in cash as of 10 April.

PSINet shares were suspended by Nasdaq on 3 April, when they were worth less than a cent.

The company reported revenues of $995.5m for 2000 - almost 90 per cent up on the previous year.