Clark McLeod is back in news, and so is his telecom disaster McLeod USA. The company announced that it is putting up for sale, and unless it finds a buyer, the company will have to file for bankruptcy again. McLeod USA had filed for bankruptcy back in 2001 and had re-emerged in 2002. There were some doubts that this company could really make a go of it, despite the retrenchment. Things are equally bleak for some other telecom operators who filed for bankruptcy and have since re-emerged. XO and Birch are two such companies.
In the fourth quarter, the company racked up a loss of over $98 million, on sales of $162 million. The company has $45 million in cash and has to make $18 million in interest payments. “To me, McLeod’s current business, its size, market share and presence in the industry are insignificant,” says Ivan Feinseth, director of research at Matrix USA, a New York brokerage told Smart Money, “At this point, I don’t see them even registering on anyone’s radar screen, let alone as an acquisition candidate.” Still for companies looking to expand in smaller cities in the midwest might find McLeod a bottom-of-the-barrel kind bargain.
- From The Archives: Bankrupt Go Bankrupt, Red Herring, December 16, 2002.