Metromedia Fiber May Seek Protection

Metromedia Fiber Network Inc. said Monday that it might be forced to seek bankruptcy protection if it can’t restructure its debts.

The New York-based company, which builds fiber-optic networks in cities, also said it may default on notes held by Verizon Communications and intends to defer payment of about $30 million in interest that was due Friday on $975million of convertible notes issued to Verizon. Metromedia is negotiating with Verizon, but the company said it could default on the debt if it fails to reach an agreement or doesn’t make an interest payment within a 30-day grace period.

Metromedia said it had $3.3 billion in consolidated debt and about $37.3 million in cash as of Feb. 28. If it is unable to restructure its debt, the company said, it may be required to file for protection under Chapter 11 of the U.S. Bankruptcy Code.

Shares of Metromedia closed Monday down 18 cents, or 67%, at 9 cents on Nasdaq.

Though backed by billionaire investor John Kluge, Metromedia has had a difficult time attracting funding during the downturn in the telecommunications sector.