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Monday June 25, 9:03 am Eastern Time Press Release Covad Announces That BlueStar Subsidiary has Executed an Assignment for the Benefit of Creditors Customer Migration Available through Covad Safety Net; Covad Continues Direct Distribution Channel SANTA CLARA, Calif.--(BUSINESS WIRE)--June 25, 2001-- Covad Communications, Group, Inc. (Nasdaq:COVD - news), the leading national broadband services provider utilizing DSL (Digital Subscriber Line) technology, today announced that its subsidiary, BlueStar Communications Group, Inc. and BlueStar`s operating subsidiaries, have executed Assignments for the Benefit of Creditors (the Assignment). The purpose of the Assignment is to shut down the BlueStar network, provide an orderly dissolution of BlueStar`s operations and provide for a transition of its customer lines. BlueStar Communications Group, Inc, a subsidiary of Covad Communications, was acquired by Covad in September 2000 and, through its operating companies, has been engaged in direct sales of high-speed Internet access and related services. Covad and its other subsidiary, Covad Integrated Services, are unaffected by the BlueStar action and will continue to operate in the normal course of business. The Assignment eliminates the cost of maintaining the BlueStar operations. As a result, it reduces Covad`s operating cost by approximately $75 million over the next year, which will aid in Covad`s efforts to achieve profitability and extend Covad`s cash into July of 2002. ``This was not an easy decision to make, but one that we felt was important strategically in our drive to improve profitability,`` said Covad Chairman, Chuck McMinn. ``Covad acquired BlueStar at a time when the financial market conditions rewarded growth into Tier 2 and Tier 3 markets and as a fast means of developing a direct sales model. In the current financial market environment, BlueStar`s cost structure is not sustainable and is not supported by its current revenue-generating capabilities. ``We intend to continue with a direct sales distribution channel utilizing Covad`s more efficient network architecture and a direct sales effort consisting primarily of telesales supplemented by a small, in-person sales force. Direct sales have proven to be successful, contributing to three percent of total lines at the end of the fourth quarter of 2000 and seven percent of lines at the end of the first quarter of this year. With these major changes in the direct sales cost structure, we will be able to continue growing the direct sales business at a much lower cost and on a faster track to profitability,`` said McMinn. Covad`s indirect Internet Services Provider distribution channel is not affected by this action. BlueStar and Covad have entered into an asset purchase agreement in which Covad has purchased the right to offer service to BlueStar end user lines, subject to BlueStar`s right to seek higher offers. The migration of these lines to the Covad network will be achieved through the Covad Safety Net program. For some customers, a new DSL line will be required, which will include free installation and a DSL modem. Some of BlueStar`s lines are located in central offices that will cease operations and will not be able to be migrated to Covad`s network. In those cases, Covad will strive to help these customers locate another DSL provider. BlueStar customers should go to www.covad.net/safetynet or call 1-888/217-6968 to seek Covad`s assistance with their migration process. BlueStar is expected to shut down its operation in 235 central offices in the BlueStar network after a reasonable transition period. Ninety-one of these are in BlueStar-unique areas and 144 are in Covad-overlap areas where both Covad and BlueStar have their own central office facilities. After this action, Covad`s network will encompass a total of 1,718 central offices, covering 40 to 45 percent of homes and businesses in the United States, and in 49 regions consisting of 94 Metropolitan Statistical Areas. ``As always, our biggest concern is to serve our customers as best we can. Our Covad Safety Net program has proven successful at migrating customer lines and providing an easy way to stay connected,`` added McMinn. Simultaneous with the Assignment, BlueStar will release approximately 400 employees located in Nashville, Tenn. and Charlotte, N.C. and in offices throughout the southeast. Covad will provide severance arrangements and benefits continuation. Covad will be offering employment to approximately 70 former BlueStar employees to grow Covad`s direct sales distribution channels and provide support for operations and information technology services. A small number of BlueStar employees will help with the liquidation of the business. The Assignee for BlueStar is Development Specialists, Inc., a financial and consulting and management firm with offices in Boston, Chicago, Los Angeles, Miami and London. The Assignee is charged with the orderly liquidation of BlueStar`s assets and distribution of any proceeds to BlueStar`s creditors. For creditors or other affected parties of BlueStar, all inquiries related to this action should be addressed to the BlueStar headquarters in Franklin, Tenn, at 615/778-6600. Quelle:http://biz.yahoo.com/bw/010625/0226.html |
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| aus der Diskussion: | Covad - Himmel oder Hölle |
| Autor (Datum des Eintrages): | Bannerman (25.06.01 16:46:02) |
| Beitrag: | 13 von 149 (ID:3811997) |
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