Tyco International's credit was lowered to junk status by two leading rating agencies Friday, adding to the troubles of the Bermuda-based manufacturing conglomerate. According to the Financial Times, Moody's and Standard & Poor's both also said they'd lower the rating still further if Tyco failed to complete the initial public offering of its financial services unit, CIT. Tyco's chief executive resigned earlier in the week and was indicted for sales-tax evasion in New York. Prosecutors reportedly are looking into whether Tyco executives used company funds to buy personal items such as artwork and homes.
The Pentagon was not commenting on a published report that British defense contractor BAE Systems is lobbying for permission to join the bidding for Cleveland-based TRW Inc. Citing industry analysts, the Washington Post said Saturday that BAE's North American subsidiary likely would provide stiff competition for US defense heavyweight Northrop Grumman, which has offered $6 billion for TRW in a hostile takeover effort.
To avoid having to go out of business, bankrupt KPNQwest asked its customers to pay the balance due on their accounts by today, the Financial Times reported. It said the idea came from customers themselves, who were alarmed at the prospect of a shutdown. The fiber-optic network is Europe's largest. The Financial Times said most of KPNQwest's monthly revenues about $45 million comes from a handful of multinational corporations, among them US computer giants Dell and Hewlett-Packard.
Nortel Networks, one of the hardest-hit companies in the telecommunications industry downturn, put $1.3 billion worth of new shares and convertible securities up for sale Friday $500 million more than had been expected. But while the move seemed likely to ease worries about Nortel's long-term viability, critics faulted it for diluting the value of shares by at least 30 percent. The Brampton, Ontario-based company announced another round of deep job cuts late last month, reducing its payroll by more than 53,000 since the start of 2001.