The deal, made public Thursday in Securities and Exchange Commission filings, settles a $263 million debt that Cogent amassed as it built a nationwide fiber-optic broadband network almost entirely out of Cisco gear. Cogent still sells Web access to large businesses and other Web service providers.
The deal is another sign of the extraordinary measures that companies like Cisco are taking as financially unstable customers crumble under the ongoing dire economic conditions. Sprint, for example, is under a similar financial strain to buy its financially ailing affiliates that resell Sprint phone service.
Representatives from Cogent and Cisco were unavailable for comment late Thursday.
The arrangement is part of Cogent's overall strategy that's erased all but $27 million of its overall $380 million debt during the past six months.
On Wednesday, Cogent also announced it received $41 million in cash from six different investment firms, including Oak Investment Partners and Worldview Technology Partners.
"Cogent remains confident and focused in our ability to continue to provide value to customers," said Dave Schaeffer, Cogent's chief executive.