- The Washington Times - Thursday, November 15, 2001

Teligent Inc. got bankruptcy court approval yesterday to lay off 300 workers and discontinue retail phone and Internet services in 11 markets including Washington.
A company official also said it expects a group of investors to formally acknowledge today that it is unable to come up with the money to buy the bankrupt Vienna, Va., telecommunications firm.
"We are expecting they will be terminating their agreement" to buy Teligent, said Jim Continenza, Teligent's chief operations officer.
The decision to lay off workers and cut service is due in part to Teligent's inability to find a buyer.
The company had reached an agreement with an investor group that formed for the purpose of buying Teligent. That group, called Teligent Acquisition Corp. and backed by Arlington investment bank Friedman Billings Ramsey Group Inc., made an initial bid on Aug. 23 to buy Teligent for $117.5 million. It reduced its bid last month to $72.5 million in cash and other stock considerations, according to a filing with the U.S. Securities and Exchange Commission.
But in a filing this week in U.S. Bankruptcy Court in Manhattan, Teligent's attorneys said the potential buyers "have been unable to complete the financing necessary to fund all of Teligent's core business operations at this time."
Teligent was once an up-and-coming telecommunications company that marketed phone and data services over a wireless network. It hired former AT&T; President Alex Mandl in 1996 to run the company and help attract the money needed to build its communications network.
But the company couldn't attract enough cash and it never had a profitable year. Mr. Mandl left in April.
Teligent Acquisition Corp. planned to buy the company's retail network in 11 U.S. cities. Now Teligent will eliminate those services. That will shrink its customer base from 11,000 to 4,000. The company will continue to market wholesale long-distance services to phone companies and Internet-service providers.
The 300 workers Teligent will lay off effective Friday marketed retail services in the 11 cities where it plans to discontinue services Boston, Chicago, Cleveland, Dallas, Hartford, Conn., Houston, Los Angeles, New York, Philadelphia, Phoenix and Washington.
Teligent's work force is a fraction of its former size.
About 3,600 people worked at the company at its height, early last year. Teligent laid off 200 workers in February and another 900 workers on May 11, just 10 days before filing for bankruptcy.
About 200 people will work there after the newest round of layoffs.
Mr. Continenza said Teligent will continue searching for a buyer and won't dismantle the company under Chapter 7 liquidation.
"We will continue to pursue other buyers," he said.
But the struggling competitive local-exchange carrier (CLEC) may not have much luck. Other local telecommunications firms have joined Teligent in bankruptcy, including PSINet Inc. and e.Spire Communications Inc.
Net2000 Communications Inc., in Herndon, laid off 335 workers last month, but has managed to avoid bankruptcy.
"Our prospects for the CLEC industry are pretty negative," said Pat Brogan, telecommunications industry analyst with Precursor Group, an independent research firm in the District.
Teligent lost $808 million last year, up from its 1999 loss of $529 million. Sales last year reached $152 million, up from 1999 revenue of $31.3 million.
A deadline to secure $350 million in financing to prevent defaulting on loans passed May 15 without Teligent finding the money.
Teligent filed for Chapter 11 bankruptcy protection on May 21, listing assets of $1.2 billion and $1.46 billion in debts.
Teligent still is losing money. In an SEC filing last month, the company reported that it had revenue of just $9.1 million for the month of September and a net loss of $308.8 million.


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