WorldCom Out of bankruptcy, MCI New NameApr 20, 2004 | UPI
Telecommunications giant WorldCom emerged from bankruptcy Tuesday with a new name MCI and a challenging future, the Wall Street Journal reported.
The company's $10.8 billion accounting scandal wiped out a stock valued at about $180 billion at its peak and drove the telecom carrier into bankruptcy in July 2002.
The former Clinton, Miss., telecommunications giant, which lost $64.5 billion from 2000 to 2001, wired $500 million to the Securities and Exchange Commission Monday as partial payment of a fraud settlement.
Another $250 million in new MCI stock will complete its payment to the SEC.
Bond holders will receive an average of 36 cents on the dollar, in newly issued MCI stock.
The newly reorganized company will have $6 billion in debt rather than $41 billion and a workforce of 50,000 rather than 70,000.
MCI faces immediate challenges, with 2003 revenues of $32 billion expected to fall to $22 billion for 2004 and a bill from lawyers and accountants of $800 million.
The Ashburn, Va., company also faces an ultra-competitive market where prices are falling.