WorldCom’s European division could be offered for sale, after it emerged that the division has less than $100 million of funding available. Although WorldCom is refusing to comment on the financial position of the unit, it is rumoured that it could be losing up to $500 million per year.
US banks have made a total of $750 million available to maintain WorldCom’s liquidity. However, less than $100 million is being directed to its Europe division. Before filling for bankruptcy, the company’s practice of holding working capital centrally meant that the division had no more than two months worth of cash.
Sales at the European division have been slashed in half after WorldCom filed the biggest bankruptcy in US history last month.