UUNet has weathered the storm caused by the bankruptcy of its US parent MCI and expects revenue for the year to December to hit around R890 million, compared with R650 million in 2002.
The increase in revenue was above the budgeted R830 million, with all the local operation`s business lines contributing to the overall rise.
This is according to UUNet CEO David Meintjies, who steered the local operation while its parent, previously known as WorldCom, contended with one of the biggest corporate scandals in US history as it sunk under $41 billion debt and was placed under Chapter 11 bankruptcy protection in July 2002.
On 31 October, a US bankruptcy judge approved MCI`s reorganisation plan, which allows it to emerge from Chapter 11. In terms of the plan, which about 90% of the group`s creditors have approved, a complex set of bondholders will get a portion of the debt owed to them, ranging from 36c to 94c on the dollar. However, stockholders will get nothing.
The group is also attempting to distance itself from its former management, which was led by cowboy-boot-wearing Bernie Ebbers. These measures include trading under the MCI name and moving its headquarters to Ashburn, Virginia from Clinton, Mississippi.
UUNet, along with MCI`s other foreign holdings, was worried it may be sold off as part of the reorganisation plan, but the group has since reaffirmed its commitment to these operations.
"MCI now has about $5 billion in cash and now that it has emerged from Chapter 11, it has the freedom to pursue other opportunities," Meintjies says.
Like its parent, UUNet has had to fend off opportunistic marketing practices by competitors as the accounting scandal took its toll.
Because UUNet is wholly owned by MCI, it does not release detailed financial statements on its operations.
Share
