British telecoms group Cable & Wireless said on Monday it is using US bankruptcy law to exit its business in the country. The group has agreed to sell Cable & Wireless America (CWA), to Gores Technology Group for $125m in cash.
The company has spent six months trying to get out of its US web hosting business at a reasonable price
It said the sale of assets to a Gores affiliate would be conducted under Chapter 11 of the US bankruptcy code.
'Positive future'
Francesco Caio, CEO, Cable and Wireless PLC, said: "As I said last June, we were looking for ways to achieve a least cost exit, whilst taking account of our customers' interests.
"I am therefore pleased we have found a solution that will allow the US businesses to have a positive future under new ownership."
As a condition of the sale, CWA filed for Chapter 11 bankruptcy protection in the US.
The move will enable it to restructure and create a much reduced cost base, mainly by eliminating and renegotiating certain lease and other contractual commitments, said the company. It will then be sold to Gores.
Shares in Cable & Wireless jumped 5 pence, or 4%, to 134.25p in London after the announcement.
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