WorldCom has filed a voluntary petition for reorganisation under Chapter 11 of the US Bankruptcy Code in the United States Bankruptcy Court, which only applies to certain US registered WorldCom entities. The process allows WorldCom to continue operating in the ordinary course of business and to maximise recovery for the company`s stakeholders. WorldCom`s non-US subsidiaries, such as UUNET SA and all its subsidiaries, are not included in the filing and will also continue to operate normally.
Under the clause, WorldCom`s management team has 120 days to file a reorganisation plan to address its debt. This is not a liquidation process but a procedure to assist financially troubled companies to restructure their liabilities and emerge as healthier and stronger entities.
UUNET SA, a WorldCom company, is confident that this move to file for bankruptcy by its parent company will not negatively impact the local company`s financial stability.
Dave Meintjes, managing director of UUNET SA, says: "WorldCom owns shares in UUNET SA, which means that UUNET SA will continue to be financially independent of WorldCom as we do not depend on WorldCom for day-to-day funding purposes, therefore we will not file for liquidation. Locally, UUNET SA is a registered legal entity in SA and is protected as a separate entity in terms of the Companies Act."
Meintjes continues: "UUNET SA currently has adequate surplus cash resources at its disposal which are expected to grow to R30 million in the next six months and we do not have any third-party debt financing in our business. We remain focused on maintaining the high levels of trust in our network service delivery and customer satisfaction to which our customers have become accustomed. The maintenance and upgrade of the network are not at risk.
"To date, 75% of UUNET SA`s international links and bandwidth is supplied by suppliers other than WorldCom. Should WorldCom services experience any interruptions, UUNET SA has the necessary contingency plans in place," says Meintjes.
In the event that WorldCom was to cease services, the Federal Communication Commission (FCC), a regulatory body in the US requires a minimum of one-month notification. "This gives UUNET SA the opportunity to activate the necessary contingency plans. This is, however, the most unlikely scenario because of the global reliance on WorldCom`s network by the whole industry," concludes Meintjes.
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UUNET SA, the largest Pan African Internet communications company, focuses on the provision of global Internet products, services and solutions. It is a financially stable company supported by visionary leadership, a strong technology foundation and nearly a decade of experience in delivery of Internet connectivity to African organisations.
All UUNET SA products and services are delivered within the required regulatory conditions. For more information, please visit the UUNET SA Web site on www.uunet.co.za.