Metromedia Fiber Network, which has recently built a $40 million fibre ring in Dublin, posted a second-quarter loss today and said it had not secured funding by its deadline, sending its stock diving by 30 per cent.
Earlier this month, Citigroup extended until August 15th a commitment to provide a portion of $550 million in financing while Metromedia tried to find more lenders. Metromedia has received two extensions from Citigroup. The deadline originally was set to expire on June 30th.
Metromedia is currently building an internet data centre at Citywest in Dublin. The company recently completed a deal with a telecoms company to provide services using its fibre network throughout the city.
Its shares jumped yesterday as investors hoped it would get financing by its August 15th deadline and it was said to have set plans to reduce costs by cutting jobs and canceling some expansion plans. The stock has fallen about 97 per cent over the past year.
The company it was still in negotiations with Citicorp and other financing sources, but it could not provide any assurance that it would get the money.
Metromedia also said its second-quarter net loss more than doubled to $205.2 million in the first half of 2001 compared with a net loss of $92.0 million last year. Revenues rose to $91.7 million from $43.3 million.
Under its commitment letter, Citigroup agreed to provide $62.5 million as long as other sources committed to providing $287.5 million.
Metromedia also needed to secure $200 million of vendor financing, for a total financing package of $550 million. Metromedia said it had received commitments of only $180 million, but it remains in talks for funding.