Level 3 Communications, Inc. (Nasdaq: LVLT) announced it has acquired the transatlantic network of Viatel, Inc. A federal judge overseeing Viatel's Chapter 11 bankruptcy proceedings approved Level 3's purchase this week.
Specifically, Level 3 has purchased from Viatel two fibers on the "Yellow" submarine cable connecting London and New York. This is the same fiber pair that Level 3 sold to Viatel in April 2000. Level 3 now owns and controls 50 percent of the fibers on the Yellow cable.
Under the terms of the transaction, Level 3 retains all cash payments already made by Viatel under the April 2000 contract, including $94 million paid to Level 3 at the end of last year. In return for the Yellow fiber pair, Level 3 has released Viatel from debts registered with the bankruptcy court totaling approximately $9 million. Viatel has also transferred 20 gigabits of capacity on the separate transatlantic cable known as "AC-1" to Level 3. Additional terms of the transaction are contained in the summary below.
The key provisions of the Level 3-Viatel transaction approved by the judge overseeing Viatel's bankruptcy include:
* Level 3 retains the cash payments already received from Viatel under Level 3's original sale of transatlantic fiber announced in April 2000, including $94 million received by Level 3 at the end of last year.
* Viatel has transferred ownership of its fiber pair on the Yellow cable back to Level 3. Level 3 now owns 50 percent of the fiber on that cable.
* Viatel has transferred backhaul fiber and 20 gigabits of capacity on the AC-1 transatlantic cable to Level 3. Those assets were originally sold to Viatel under the April 2000 contract.
* Level 3 has released Viatel from debts it registered with the bankruptcy court totaling approximately $9 million. Level 3 has also paid Viatel $100,000 in cash.
* Level 3 will provide Viatel with two unprotected 2.5-gigabit wavelengths on the Yellow cable. Viatel will pay $500,000 in cash to Level 3 to cover one year's operation and maintenance charges on the wavelengths and other costs.
About Level 3 Communications:
Level 3 (Nasdaq: LVLT) is a global communications and information services company offering IP services, broadband transport, colocation services and the Softswitch-based services. For more information, visit www.Level3.com.