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Sunday, 30 September, 2001, 08:54 GMT 09:54 UK
Excite@Home files for bankruptcy
Excite logo
Excite@Home has filed for bankruptcy and agreed to sell its core broadband internet access business to controlling shareholder AT&T.

The firm, which has lurched from one crisis to another this year, is going bankrupt under "chapter 11" rules, which give it protection from creditors, while allowing operations to continue.

"This filing is a tool to protect the value of the broadband business for the benefit of the company's financial stakeholders and will help reassure our customers that service will continue uninterrupted through the restructuring," Excite@Home chief executive Patti Hart said in a statement.

Unless Excite@Home receives a better offer, AT&T will pay $307m for its high-speed internet business, which has 3.6 million customers worldwide.

AT&T has also agreed to hire a "substantial" number of Excite@Home's 1,600 staff.

Little left

The deal, which still requires approval from US bankruptcy authorities, leaves Excite@Home with its loss-making content businesses, including search engine and internet portal Excite.

The firm's initial plan was to shed the content assets, while holding on to the more successful broadband unit.

But in the current grim climate for online businesses, no buyer for the content side was found.

The bankruptcy filing allows Excite@Home to continue trading, but the long-term future of the company is still far from assured.

The current collapse in advertising, exacerbated by the after-effects of the US attacks, has further battered Excite's revenues.

High hopes dashed

The company was formed just over two years ago in a high-profile $6.7bn merger of Excite and AtHome, near the peak of the internet boom.

But the firm struggled to create fruitful cooperation between the content and access sides of the business, and its debt ballooned just as shares in tech stock collapsed last year.

Excite@Home enters bankruptcy with just $150m in against debts of $1.1bn.

Its shares, which once traded as high as $55, closed at 15 cents on Friday before the bankruptcy was announced.

See also:

28 Sep 01 | Business
AT&T seeks sale of units
31 Aug 01 | Business
Excite@Home's woes mount
22 Aug 01 | Business
Excite UK holds on
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Investors desert Excite@Home
23 May 01 | Business
T-Online eyes ExciteAtHome
06 Jun 01 | Business
Excite@Home retreats in Europe
08 Jan 01 | Business
GUS gives Breathe new life
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Breathe loses battle for life
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