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CEO Says Qwest Not Considering Bankruptcy

Christina Torode
Qwest Communications International

"In the 90 days that I have been here, that word has not come up in my presence other than outside the company," Notebaert said during the Morgan Stanley Global Communications Conference, held here.

Notebaert said there were many paths Qwest could take and, at this point, it would be purely speculative to deal with the issue of bankruptcy.

Qwest gained some breathing room last week when it reached a deal with its lenders to amend its $3.4 billion credit facility.

The prior agreement with lenders did not allow Qwest's debt to exceed four times its cash flow. With the new guidelines, Qwest's debt can now be no more than six times its cash flow.

The renegotiation of its credit facility requires Qwest to use a portion of the money from the sale of its directory business, QwestDex, to decrease the facility to $2 billion. This amount is expected to decrease further to $1.25 billion with the close of the QwestDex sale.

"When we did the Dex sale, when we renegotiated our bank line and when we pulled down $750 million as a buffer, we also said what we needed to do is reduce the amount [of debt we're carrying because it's way too high," he said.

To reduce debt and cash burn rate, Qwest is either selling off or shutting down 10 lines of business that Notebaert said would eliminate $1 billion in cash burn annually.

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