AT&T; Canada Expects to Miss Bond Payments

AT&T; Canada Inc., the money-losing phone and Internet-service provider that is 31% owned by AT&T; Corp., will miss $51.2 million in bond payments this month as the company tries to conserve cash amid slowing demand.

AT&T; Canada said it has a 30-day window to make the two interest payments, which are due Sunday and Sept. 23. The company has enough cash to meet that deadline, spokesman Ian Dale said.

The Toronto-based company is in debt-restructuring talks with bondholders, bank lenders and AT&T;, and is aiming to win an agreement by year’s end, Dale said. AT&T; Canada has said it will cut more than 1,000 jobs and trim capital spending 23% this year to keep from running out of cash. The company’s debt was $2.9 billion as of June.

AT&T; Canada posted a second-quarter loss of $850 million after writing down the value of assets.

The interest payment due Sunday is $47.8 million. The one due Sept. 23 totals $3.4 million. AT&T; Canada said it had about $253 million in cash Aug. 31 and expects to receive $151 million from the exercise of employee stock options.