Tuesday, July 09, 2002
Buffett bets on Level 3
The Associated Press
Billionaire Warren Buffett and two other backers are investing a total of $500 million in Level 3 Communications Inc. to help it fund acquisitions as the telecommunications industry consolidates.
Shares of Level 3 climbed 50.9 percent, or $1.47 a share, to close Monday at $4.36 on the Nasdaq Stock Market.
Legg Mason Inc. and Mr. Buffett's Berkshire Hathaway Inc. each agreed to buy $100 million and Longleaf Partners Funds agreed to buy $300 million in notes that will mature in 10 years and pay 9 percent cash interest.
Cuts at energy firm
Allegheny Energy Inc. said Monday it will cut 600 jobs, or 10 percent of its work force. It also canceled l construction of two power plants, one in St. Joseph County, Ind., after an unexpectedly weak first half. The company with customers in Maryland, Ohio, Pennsylvania, Virginia and West Virginia also lowered its 2002 earnings estimate by more than 25 percent, citing lower wholesale energy prices, mild winter and spring weather, and substantially decreased energy trading since the collapse of Enron Corp.
Accenture job cuts
Accenture Ltd. will fire 1,000 workers, a 1.3 percent reduction, by the end of August as customers of the world's largest computer consultant spend less.
Most of the cuts will be made in the U.S., the U.K. and Australia. Accenture helps companies select and install computer systems and employs 75,000.
The company, formerly Andersen Consulting, raised $1.67 billion in an initial share sale last July.
Log On America Inc., an Internet-service provider whose shares have fallen 90 percent in a year, said Monday it will file for Chapter 11 bankruptcy protection.
The company, based in Providence, R.I., said it wants to reduce about $10 million in debt in a reorganization. Log On America said Earthlink Inc. failed to pay certain fees under a subscription acquisition agreement.
T-bill rate rises
Interest rates on short-term Treasury bills rose Monday. The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 1.695 percent. Some $15 billion in six-month bills were auctioned at a discount rate of 1.735 percent.
The three-month rate was up from 1.690 percent last week and was the highest since three-month bills averaged 1.700 percent on June 17. The six-month rate was up from 1.730 percent last week and was the highest since 1.765 percent on June 24.
El Al to sell to investors
Israel plans to sell its national airline, El Al, to private investors, the country's Cabinet secretary said Monday, reversing an earlier decision to keep a majority of the company in the hands of the government.
According to the new plan, approved by a ministerial committee, 49 percent of the company would be sold in the first part of 2003, and the remainder would be sold in phases.
In 1998, when the original decision was made to sell no more than 49 percent, officials said it was important to keep ultimate control of the national airline in government hands for security reasons.
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