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How the big ones got away

Emerging from bankruptcy protection, some of the biggest corporate failures ever have struggled through the net and are set to take centre stage again. With telecoms consolidation looming, bankers hope to earn big fees from them. But smaller, more prudent telecoms that avoided disaster may get lost in the wake.

OVER THE PAST 18 months or so, the financial world has been rocked by bankruptcies at leading telecoms and communications equipment makers, including Global Crossing,Teleglobe, 360networks, Marconi, WorldCom and NTL.

But now these bankrupt operators are working their way through the bankruptcy net and starting to seek new funding. Rather than running for cover, investors and bankers are eagerly contemplating the massive debt capital markets opportunities presented by the return of these fallen angels as industry consolidation takes hold.

There may be despair, though, for smaller players whose prudence meant they were not lured into bankruptcy, With the big fish swarming back to the market, small telecoms' financing plans might be shunned by lenders wooed by the allure of hefty fees from large financing packages.

UK-based cable operator NTL emerged from bankruptcy protection at the beginning of the year. In May, Marconi announced the completion of a complex restructuring, hammered out over a year of talks with creditors, which saved it from collapse. Marconi Corporation, the rejigged UK telecoms equipment maker, was relisted in May after a £4 billion ($6.4 billion) rescue programme and the appointment of new senior management. WorldCom should emerge from Chapter 11 bankruptcy in the autumn.

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