- The Washington Times - Tuesday, May 1, 2001

Teligent Inc. Chairman and Chief Executive Alex Mandl was replaced yesterday as the company's new owner took over operations of the cash-starved wireless telecommunications company.

New Jersey long-distance phone company IDT Corp. yesterday confirmed it took over the Vienna, Va., company last week.

IDT became Teligent's majority owner by purchasing stock owned by Liberty Media, a unit of AT&T; Corp. It now owns 33.7 percent of Teligent.

"Compared to the upside, the cost is minimal," IDT spokesman Gil Nielsen said.

Mr. Mandl, the 57-year-old former AT&T; Corp. executive lured in 1996 to run Teligent, said his decision to leave came after IDT began inquiring about buying a stake in Teligent.

"The first thing I expressed to them was that I was interested in moving on," he said.

Changes at Teligent became evident last week, when a document filed with the U.S. Securities and Exchange Commission said three Liberty Media executives resigned from Teligent's board of directors and were replaced by IDT Corp. founder and Chief Executive Howard Jonas, IDT Senior Vice President Morris Lichtenstien and IDT Senior Executive Anthony Davidson.

Yoav Krill, managing director of IDT's European division, was named acting CEO and chief operating officer of Teligent.

"We think it's a viable business," Mr. Nielsen said.

But it still is teetering on the edge of bankruptcy.

Teligent had $1.44 billion in long-term debt and just $194 million in cash as of March 26, according to a regulatory filing.

The company was in jeopardy of violating a credit agreement that expired yesterday. Teligent was scheduled to come up with $350 million in additional financing commitments, but the company got an extension until May 15 because of IDT's purchase, the company said in a statement. It will be in default if it misses the new deadline.

The company has never had a profitable year. Last year it posted a loss of $808 million, up from its 1999 loss of $529 million. Revenue jumped from $31.3 million in 1999 to $152 million last year as the company entered more markets.

Teligent was on track to post a profit by late 2003 or early 2004.

But Mr. Mandl won't be at the helm if that happens.

Any disappointment he has about Teligent's performance is due to the scarcity of financing, Mr. Mandl said yesterday.

"Capital has dried up for [competitive local exchange carriers]. The [regional Bell operating companies] are very powerful, and that's what the CLECs have to compete against," Mr. Mandl said.

The shortage of money forced Teligent to lay off 172 workers Feb. 15.

Teligent's stock has floundered, falling from $97 a share its high last year to its close yesterday on the Nasdaq Stock Market of 69 cents. It may be delisted.

Teligent still may be forced to file for bankruptcy protection and reorganize its massive debt, despite IDT's purchase.

"It could still go through bankruptcy," Mr. Nielsen said.

Teligent, founded in 1997 following the Telecommunications Act of 1996, markets local calling, long-distance calling and Internet services to businesses in 43 U.S. markets. Its digital microwave network sends signals to rooftop dishes, a wireless system that bypasses the network of the Baby Bells.

IDT wants Teligent's network.

"IDT is a great partner for Teligent. They really believe in fixed wireless and they know the industry. I feel good that they will move the company forward," Mr. Mandl said.

IDT shares rose 24 cents yesterday, closing at $21.65 cents a share on the New York Stock Exchange.

IDT has not said if any of Teligent's 2,357 workers will be laid off.

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