- The Washington Times - Friday, April 6, 2001

PSINet Inc. said yesterday it has sold another subsidiary. The Ashburn, Va., Internet service provider is scrambling for money to restructure its $3.6 billion debt.

PSINet said that one of its wholly owned subsidiaries, Metamor Holdings, completed the sale of its stake in Decan Groupe for about $34.6 million to Getronics International.

The sale of PSINet's assets is not expected to generate enough money to meet its financial needs, the company said yesterday. PSINet officials on Tuesday said the company might file for bankruptcy.

"We have said in previous statements that we are exploring all options," PSINet spokesman Eric McErlain said. "Is today's asset sale the last? I don't know."

PSINet postponed filing an annual report that was due March 31 at the Securities and Exchange Commission. The SEC gave the company a 15-day extension.

PSINet had about $254 million in cash on hand as of March 30, the company reported this week.

While the sale of assets could help PSINet eliminate some debt, buyers are likely to get the company's assets for less than they would pay otherwise because PSINet has little negotiating power, said Peter DiCaprio, an analyst at investment banker Thomas Weisel Partners.

"I'd say they are selling assets at bargain basement prices and companies are taking advantage of their distress," Mr. DiCaprio said.

Decan Groupe markets information technology consulting services.

PSINet completed the sale on Wednesday of PSINet Transaction Solutions for $277 million. PSINet spent $720 million last year to buy the company, which operates data networks used in point-of-sale credit-card transactions.

PSINet, which has 6,600 employees, said it will treat the sold subsidiary as a discontinued operation, and it will lose $340 million on the deal.

The Nasdaq Stock Market halted trading of PSINet's stock on Tuesday and requested more information from the company about its financial status.

Its stock price has fallen more than 99 percent since April 3, 2000. The stock fell to 19 cents a share before trading was halted, down 99.4 percent from $30.50 a share last April 3.

PSINet, founded in 1989, built its business by selling Internet connectivity to businesses in 27 countries through 100,000 miles of fiber-optic cable. It also markets Web-hosting services and owns 16 data centers worldwide.

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