PSINet Considers Bankruptcy

PSINet Inc., which helps companies connect to the Internet, is considering filing for bankruptcy after saying it will delay submitting its annual financial report.

PSINet, whose stock has dropped 99% in the last year, notified the Securities and Exchange Commission that it won’t file its annual report within the prescribed time frame because of “rapidly changing circumstances,” the company said. The Ashburn, Va.-based company said it expects to file its annual report within a 15-day extension period. PSINet said its cash and cash equivalents are expected to fall short of its anticipated needs without successfully implementing its previously announced restructuring.

PSINet said that as of March 30, it had cash, cash equivalents, short-term investments and marketable securities of about $254 million, of which about $27 million secures obligations under letters of credit and other agreements. Trading in PSI shares fell 3 cents to close at 19 cents on Nasdaq. PSINet provides corporate Internet access and private networks, Web and database hosting and managed Internet security.