Troubled PSINet juggles staff
The Internet service provider shuffles its executive ranks to restructure the company, including naming its CFO to the post of chief restructuring officer.
PSINet appointed Lawrence Hyatt, its chief financial officer, to the newly created position. The company also replaced its chief executive officer, William L. Schrader, with Harry Hobbs, the company's former president and chief operating officer.
Hobbs will focus on developing a business plan to help the company through its restructuring.
Hard times call for drastic measures. The move comes just days after the Ashburn, Va.-based company was delisted from the Nasdaq--usually the first step toward obscurity. PSINet was once a high-flying Internet stock whose shares hit as high as $59.81 in March 2000 but have since skidded to less than a quarter per share.
The communications industry has been hit especially hard by the technology-spending slowdown. Among those that have felt the pain are Flashcom, NorthPoint Communications and Covad Communications. Even the leaders in the sector, from equipment makers such as Cisco Systems, Nortel Networks and Lucent Technologies, to telecommunications giants such as AT&T and Worldcom, have felt the sting of the downturn.
PSINet had previously announced that its cash, and other investments that can easily be converted to cash, are not enough to help it meet its anticipated monetary needs. PSINet is still trying to find ways to remain afloat, including selling parts of the company and restructuring its debt.
The company also announced its board had formed a restructuring committee to streamline the company's restructuring efforts.
PSINet earlier hired Dresdner Kleinwort Wasserstein and Goldman Sachs as financial advisers.