New York, Sept. 5: Clearing away concerns that it could be forced into bankruptcy before the end of the year, Qwest Communications International announced arrangements on Wednesday with bankers to borrow $ 750 million and extend by two years a $ 3.39-billion credit line scheduled to expire next May. As expected, Qwest’s lenders also relaxed requirements on how profitable Qwest has to be each quarter to avoid a default on the credit line.
The $ 750 million loan was obtained by QwestDex, the company’s phone directory subsidiary, and must be repaid when Qwest completes its previously announced deal to sell QwestDex for $ 7.05 billion to a group of financiers.
“Coupled with the pending sale of QwestDex, these actions announced today and the cash flow from our operations should provide us with enough funding for the next several years and put any liquidity concerns behind us,” Oren Shaffer, Qwest’s vice-chairman and chief financial officer, said in a written statement.
Qwest is the dominant local phone carrier in 14 Western states and a provider of long-distance phone and data services in other regions. Some sceptics warned on Wednesday that none of the financial manoeuvring addressed Qwest’s long-term chances of dealing with its $ 26.3 billion debt load.