- The Washington Times - Saturday, September 1, 2001

AN JOSE, Calif. (AP) In another blow to financially troubled ExciteAtHome, two major cable companies said yesterday they will terminate their partnerships with the high-speed Internet provider.

Meanwhile, an investment firm that had arranged emergency funding earlier this year said discussions are continuing on the repayment of the $50 million it had invested and later demanded returned.

Promethean Asset Management LLC said yesterday it has taken no action regarding the convertible notes. Promethean claims ExciteAtHome had misrepresented its financial woes.

"AtHome has taken concrete steps that may form the foundation for potentially constructive solutions to resolve the breach of terms of the notes," Promethean said in a statement.

Meanwhile, Comcast Corp. and Cox Communications Inc. said they will exercise the right to exit from their agreements effective June 4, 2002.

The end of the deals does not mean the companies' cable-mo-

dem customers will lose access. Rather, Comcast and Cox are likely to take over some operations themselves and find new partners for others.

"We want this to be a Cox-managed network," said Cox spokeswoman Laura Oberhelman. "We will have a greater amount of control over our network and assuming a lot of the responsibilities that sit with ExciteAtHome."

Steve Burke, president of Comcast Cable, said exercising the exit provision was in the best interest of customers and shareholders in the light of reports of ExciteAtHome's financial condition.

Both Comcast and Cox also are in discussions with ExciteAtHome about forming new, more limited agreements.

"That being said, we will have 950,000 customers by year end and we need to ensure that they continue to be well-served," Mr. Burke said.

But it remains to be seen whether Redwood City, Calif.-based ExciteAtHome will survive into next year. The once high-flying company said in August that its independent auditors expressed doubt about its viability.

The latest crisis was the result of $100 million in convertible notes sold by ExciteAtHome in June to stave off another cash crunch. Promethean, which bought half the notes, later said ExciteAtHome misrepresented its financial condition and how long the money would last. On Monday, Promethean demanded a $50 million payment by yesterday.

"We don't think there's merit in this call for the loan," Stephanie Xavier, an ExciteAtHome spokeswoman, said yesterday. "We're not paying the money today, and we're in active discussions with them about the call."

Though Promethean did not take action yesterday, the firm said it will monitor the situation closely "to determine what actions may be necessary to protect its rights," according to the statement.

Still, the $50 million is just a fraction of the $1 billion debt load carried by the company.

AT&T; Corp., which is both a cable partner and controlling shareholder, has not made its intentions known. AT&T; did not immediately return a call seeking comment. Some analysts believe AT&T; or another investor may make a last-minute bailout.

ExciteAtHome announced yesterday that it will hire an investment banking firm as a financial and restructuring adviser. The firm will assist the company in "exploring its options related to its financial position," according to a statement.


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