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AT&T may buy KPNQwest assets

KPNQwest has seen its debt mount after a spending spree to expand
KPNQwest has seen its debt mount after a spending spree to expand  

AMSTERDAM, Netherlands -- Bankrupt Dutch telecoms group KPNQwest said on Monday AT&T, the No. 1 long-distance phone company in the U.S., may snap up its main assets.

Koen van Zijl, a spokesman for KPNQwest, which filed for bankruptcy after last-minute talks aimed at securing new funding failed, told Reuters: "There are several potential buyers, but AT&T is the most likely one."

He added that AT&T (T) was currently going though its books at the company's headquarters in the Netherlands. AT&T declined to comment.

The company's stock fell by as much as 71 percent to 0.09 euros on Monday, valuing KPNQwest at less than 5 million euros ($3.8 million). That's a far cry from the 40 billion euros valuation at the peak of the telecom boom in 2000.

Euronext, the operator of the Amsterdam bourse, plans to kick the stock of its index on Thursday.

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Its demise has surprised many investors and market watchers, who had expected the company to survive the Internet data network collapse.

KPNQuest provides Internet services throughout Europe over its fibre optic networks but has been hit by a slowdown in the telecoms market -- leaving it with over-capacity and mounting debts after a spending spree to expand services

The company owed more than 2 billion euros ($1.8 billion) to its lenders and its two biggest shareholders, KPN of the Netherlands and Qwest (Q) of the U.S., have refused to prop up the ailing company.

"What has happened is unbelievable,'' Philip Scholte, telecoms analyst at Stroeve brokerage in Amsterdam, told Reuters. "It's difficult for me to accept that business has deteriorated this badly in only a couple of months.''

KPNQwest has assured investors in February it had enough cash to get by, and in mid-May it said credit protection was not an option. One week later it asked for protection from creditors, and then on Friday filed for bankruptcy.

Analysts have said KPNQwest's network could fetch as much as 250 million euros.


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