RESTON, Va.—XO Communications Inc. said it reached a definitive agreement with Forstmann Little & Co. and Telefonos de Mexico S.A. de C.V. on the terms of their previously announced plan to invest $400 million each in XO in exchange for equity in the new company.
The agreement is still subject to a number of conditions, including XO successfully completing a restructuring of its balance sheet, but if those conditions are met, Forstmann Little and Telmex would each receive a 39–percent ownership in XO.
XO said it is in discussions with its lenders regarding modifications to its secured credit facility and with the holders of its senior notes regarding the restructuring if its debt.
XO also reached a forbearance agreement with its lenders that gives XO until April 15 to reach an agreement with its creditors regarding the balance sheet restructuring.
If the conditions are not met, XO said it plans to seek bankruptcy protection.
