Qwest Communications International Inc. CFO Oren Shaffer told analysts Tuesday the company is mulling a variety of financing options, including the sale of unprofitable assets and the extension on the maturity of bondholder debt, to improve its balance sheet.
“We have a specific list of assets that are on the market,” Shaffer said in a meeting from New York that was broadcast on the Web. Qwest not only will generate cash through such sales, “They also in most cases [will] stop a cash burn,” he said.
Qwest currently is not in talks to sell local access lines, CEO Dick Notebaert said.
Shaffer also mentioned equity as a means to improve the balance sheet, but he did not elaborate.
The Denver-based carrier reached an agreement with its lenders earlier this month to extend the maturity of its loans by two years to May 2005 and amend its financial covenants. Last month Qwest announced reaching an agreement to sell its publishing directory business, QwestDex, for $7.05 billion in two stages to The Carlyle Group and Welsh, Carson, Anderson & Stowe.
But the local exchange carrier in 14 states amassed a huge debt-load in the 1990s’ as it built a fiber-optic network weaving in and out of cities across the country. Qwest still is spending money on the national network but the company is tailoring capital expenditures to a service requirement or a “specific and immediate growth opportunity,” Shaffer said.
Qwest owed $26.6 billion in debt at the end of the second quarter with $250 million maturing at the end of the year and $1.155 billion due in 2003. The company initially had to pay back $5.89 billion within a year of the second quarter closing before it renegotiated its bank terms.
The company anticipates generating positive cash flow for the year.
