May 31, 2002, 10:48 AM — Embattled Internet services company KPNQwest NV is bankrupt, as an attempt to sell assets to raise cash to meet its most urgent financial obligations has failed, the Hoofddorp, Netherlands, company said Friday.
It is unclear what the immediate effect of the bankruptcy is for KPNQwest's customers. The company, which provides services across an 18 country, 25,000-kilometer network, said in a statement that it is working with customers on contingency plans "should the current situation result in instability or a total shutdown of the KPNQwest" network.
KPNQwest filed for bankruptcy protection last week, shortly after the members of its supervisory board resigned.
The heavily indebted and loss-making business went into a financial tailspin after its founders, main shareholders Koninklijke KPN NV and Qwest Communications International Inc., and banks withdrew support.
Several of KPNQwest's subsidiaries across Europe will file for bankruptcy protection now that the main company has toppled, KPNQwest said. Management and court-appointed administrators will continue to work on the sale of "a substantial part of" KPNQwest, which includes the central European operations for which no bankruptcy protection has been requested, the company said.
KPNQwest was founded in November 1998 by KPN, based in the Netherlands, and Qwest of the U.S. Qwest owns 47 percent and KPN has 40 percent of KPNQwest.