International Fibercom has announced it may declare bankruptcy and that CEO, chairman and president Joseph P. Kealy has resigned. The company’s problems have been blamed on the slowdown in telecommunications spending and International Fibercom’s exposure to the ailing emerging carrier market for the demise of the Phoenix-based installer of fiber-optic cables.
The company’s largest customer, Velocita Corp., a Falls Church, Va.-based data services provider, had failed to pay $29 million in accounts receivable and other expenses.
International Fibercom declined to explain Kealy’s departure or provide further details of its financial condition. Peter A. Woog, an outside director at the company, will take over as chairman and CEO. Anthony Baumann, COO, has been promoted to president.
Investors knew the company was on the verge of bankruptcy for months. In the company’s Sept. 30 quarterly report, it disclosed that it had defaulted on various debt agreements, including its operating line of credit.
There is substantial doubt regarding the company’s ability to continue as a going concern, the report stated. The company is pursuing alternatives, including sale of all or part of the company, to raise additional capital to meet future financial obligations. But if the company is unable to raise additional financing or implement its business plan, it will have to curtail operations.
For the September quarter, International Fibercom reported a loss of $122 million on revenue of $68 million. The company’s credit facility had an outstanding balance of $96.2 million as of Feb. 8. It also had a $15 million equipment lease facility.