BROOMFIELD, CO, February 6, 2003 - Level 3 Communications, Inc. has completed its acquisition of substantially all the assets and operations of Genuity, a Tier 1 Internet Protocol (IP) communications company based in Woburn, Mass. As consideration, Level 3 has paid $60 million in cash to Genuity plus $77 million in cash for prepayments to vendors for network services to be used by Level 3 in 2003. In addition, Level 3 is assuming certain of Genuity's long-term operating agreements.
Level 3 is purchasing substantially all the assets and customer contracts owned by the operating subsidiaries of Genuity, Inc. Pursuant to the asset purchase agreement signed by the companies on November 27, 2002, Level 3's cash consideration at closing was adjusted from the previously announced amount of $242 million, including adjustments related to the timing of closing, employee severance reimbursements, and other adjustments relating to decisions made to date regarding Genuity's operating agreements.
The cash consideration from Level 3, along with the cash remaining on Genuity's balance sheet, will be available to pay the creditors of Genuity, which filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In accordance with the asset purchase agreement, the final dollar amount of the cash consideration remains subject to additional adjustment within the next three months, but those adjustments are not expected to be significant.
As a result of the transaction, Level 3 now operates one the largest Internet backbones in the world and is the primary provider of Internet connectivity for tens of millions of dial-up and broadband subscribers, through its ISP, cable and DSL partners.
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