XO Communications Files For Bankruptcy

XO Communications

Earlier this year, a group of investors led by Forstmann Little and Telemax signed a deal to invest $800 million in XO. As of June, however, Forstmann Little and Telemax asked to be released from the deal. XO refused to let the investors out of the contract. Combined, Forstmann Little and Telemax have invested $1.5 billion in XO, excluding the proposed $800 million investment.

XO said it will stick to the deal with Forstmann Little and Telemax as its initial restructuring plan and, if the deal doesn't go through, it will convert $1 billion in loans into common equity and $500 million of pay-in-kind junior security debt. XO said layoffs and facility closures aren't part of the restructuring plan.