WASHINGTON (voa) – The chief executive of WorldCom, the second biggest U.S. based phone company that is at the center of an accounting scandal, said it is not yet certain whether the company will have to declare bankruptcy.
John Sidgmore said WorldCom is fully cooperating with government regulators who have charged the company with accounting fraud.
Speaking at the National Press Club in Washington, Mr. Sidgmore said it is up to creditors whether WorldCom seeks protection under the U.S. bankruptcy code, and warned the company’s survival is a matter of national security. WorldCom last week stunned financial markets with news that it had covered up nearly $4 billion worth of expenses.
Mr. Sidgmore said WorldCom has vital assets that have considerable financial value. “WorldCom is the largest – by far the largest – Internet carrier in the world,” he said. “And by many estimates we carry over half the Internet’s traffic, including potentially over 70 percent of e-mails sent in the United States, and 50 percent of all e-mails in the world.”
Mr. Sidgmore said WorldCom has over $2 billion of cash on hand and that a payments crisis is unlikely to arise until bond payments are due in January. WorldCom, which grew rapidly through acquisitions, is a very heavy corporate debtor. Its executives are to answer questions before a congressional committee next Monday.
