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Last Updated: Monday, 14 April, 2003, 09:30 GMT 10:30 UK
WorldCom plans image change
MCI logo
New name, new home, old debts
Fallen telecoms giant WorldCom has announced plans to change its name, move offices and emerge from US bankruptcy.

It has also appointed a new chief financial officer, Robert Blakeley.

The second-largest US long-distance telecoms operator last year filed the world's largest bankruptcy after a $9bn (5.7bn) accounting scandal was unearthed.

The deal will see the company renamed as MCI and given over to its creditors, who are owed $3.5bn-4.5bn.

MCI is the name of its domestic long-distance telephone unit.

Under cowboy-booted former chief executive Bernie Ebbers, the company embarked on a debt fuelled acquisition spree that spectacularly imploded after accounting irregularities were exposed.

Debt deal

WorldCom collapsed under $41bn in debt when it filed for bankruptcy in July 2002.

Creditors of WorldCom will receive about 36 cents in the dollar on $26bn in debts, while creditors to subsidiaries MCI and Intermedia will receive 80 and 94 cents respectively on $4bn of debt.

Shareholders in the company will receive nothing.

About 90% of the creditors approved the reorganisation, which still needs to be passed by the bankruptcy court.

New look

The renamed company will launch a global advertising blitz to win over sceptics.

"With established brand equity and a name that stands for integrity, innovation and value, we're ready to regain our leadership position in the marketplace," company chairman and chief executive Michael Capellas said in a statement.

New chief financial officer Robert Blakely previously held that position at US companies Lyondell Chemical and Tenneco.

MCI will be relocated to Ashburn, Virginia, from Clinton, Mississippi.

Mark Gregory, BBC Business Correspondent
"Worldcom was one of the most spectacular casualties..."

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