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KPNQwest workers walk out

The skeleton staff of bankrupt KPNQwest is gone, leaving the network in limbo amid hopes that its trustees would soon reach a deal to sell its assets.

The skeleton staff of bankrupt KPNQwest walked out Friday, leaving the network in limbo amid hopes that its trustees would soon reach a deal to sell the remnants to one of its founders, KPN.

Though the company's employees had previously warned they would start shutting down on Friday what was once Europe's largest data network, they said they would leave it running for now but would not be around if anything went awry.

The Dutch company was declared bankrupt at the end of May after its parents and main clients, KPN and U.S. phone carrier Qwest Communications International, terminated financial support as the company faced shrinking revenue and an insurmountable debt pile.

With KPN's help, KPNQwest's court-appointed trustees had managed to keep a substantial part of its network running despite many close calls, preventing a possible disruption in Europe's Internet traffic and giving customers--shocked at the company's swift collapse--time to switch to other providers.

"Nearly all the people have left the building by now, with a couple staying around to write some e-mails and send out a few resumes. But they have not shut down the network," said Jos van der Klauw, head of operations at KPNQwest.

Hopes were high that KPNQwest's trustees and creditors would soon seal a deal to sell the KPNQwest's assets in Western European to KPN, said Van der Klauw.

"We are leaving the network just floating," he said, adding that the workers--who were paid up to Friday and had threatened to shut the network if no buyer was found by then--hoped for a deal that meant they would be offered new jobs next week.

Van der Klauw said the workers' decision to walk out "might not affect functionality. It's all about luck."

Talks proceed
KPNQwest administrator Eddie Meijer said talks with KPN, which owns 40 percent of the company's nearly worthless equity, were ongoing.

"We are ready to transact?We hope we can do the deal with KPN," Meijer said early Friday, adding that he hoped there would be a decision later in the day on KPN's undisclosed bid.

More than 40 groups were once interested in buying all or parts of KPNQwest's network, but the liquidators have managed to sell only parts of it and pulled in slightly more than $20.2 million (20 million euros) so far.

KPNQwest, which was established just three years ago, once had a market value of about $42.5 billion.

Telia, the Nordic region's largest telecommuications group, has already snapped up other parts of KPNQwest's network and has expressed interest in the assets KPN wants. But Meijer said the companies were not in a bidding war.

KPN said Thursday it was only interested in the network if it was intact and had customers, but KPN spokesman Bram Oudshoorn said his company had set no deadline, though he expected a decision soon on its bid.

"We are in discussions. It won't take forever. I think it will be soon. But you never know," Oudshoorn said when asked when he expected a decision on KPN's bid.

KPN led a group of operators who funded the network's operations for several weeks after KPNQwest's collapse, before cutting support last week to put pressure on the company's administrators and creditors.

KPN has refused to disclose how much it is bidding, but sources close to the talks have said it offered about $20 million for the network earlier this month before a part of it was sold last week to Telia.

KPNQwest's assets have been under some form of bankruptcy procedures in nearly a dozen countries, complicating any talks.

"We did not want to frustrate the negotiations going on by shutting down the network," Van der Klauw said.

Story Copyright © 2002 Reuters Limited. All rights reserved.