ANCHORAGE (AP) General Communication Inc. will accept $11 million in future services from WorldCom as part of a settlement of debts owed by the Lower 48 telecom giant, which has filed a plan for reorganization under bankruptcy protection.
WorldCom, the No. 2 long-distance phone-service provider in the United States, filed for Chapter 11 bankruptcy protection last July after a federal accounting inquiry revealed that the company had reported billions of dollars of profits that did not exist.
GCI and WorldCom are strategic partners, handling calls for each other into and out of Alaska. The money GCI is owed comes from calls the Anchorage-based company had handled but had not been paid for when WorldCom filed for bankruptcy. The bankruptcy filing froze payments on all WorldCom debt up to that point.
Originally, WorldCom had owed GCI about $16.5 million. That amount was lowered in September after a third party that had been using WorldCom as its billing agent paid GCI roughly $3.5 million, said GCI spokesman David Morris on Tuesday.
The companies further whittled down the amount owed to $11 million by resolving outstanding billing disputes and other issues, Morris said.
To settle the debt, WorldCom, which has remained in business and expects to get out of bankruptcy court later this year, has agreed to provide an $11 million credit to GCI for future services.
WorldCom is GCI's largest single customer, accounting for some 20 percent of its total revenue. The company also is one of GCI's largest stockholders, owning 5 million shares, or 9 percent of the total stock.
Executives of GCI, which also provides local phone, cable TV and Internet service in Alaska, said they are pleased with financial terms of the settlement. They said it affirms an important contract and their long-standing business relationship with WorldCom.
''We look forward to WorldCom's emergence from Chapter 11 proceedings and participating with them in their future growth opportunities,'' said Ron Duncan, GCI's chief executive.
The companies said they expect the bankruptcy court to accept the settlement within the next 60 days.
Peninsula Clarion ©2015. All Rights Reserved.