Genuity, Lenders Agree To 30-Day Extension

Genuity

Genuity's lenders, a global banking consortium and Verizon Communications, extended a previous two-week "standstill" between the three parties.

In exchange, Genuity will pay the bank group for $50 million, with a commitment that the banks, Verizon and Genuity will pursue a binding term sheet on revisions to its credit facilities.

The banking consortium had extended Genuity a $2 billion line of credit, and Verizon loaned it $1.15 billion.

The previous two-week standstill was reached July 29 after Verizon backed out of a takeover of the company on July 25, putting Genuity in default of the $2 billion line of credit and leaving the company with two weeks to renegotiate debts.

Genuity also announced that it would no longer fund European hosting company Integra S.A. Genuity, which owns 93 percent of Integra, after an examination of Integra's financials by Genuity's management and board of directors.

In an open letter published on Genuity's Web site, chairman and CEO Paul R. Gudonis said that the extension was effective Aug. 12.

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