AT&T LatAm faces funding gap; shares plunge

AT&T Latin America Corp., which provides telecommunication services to companies in Latin America, is slipping into negative cash flow with a funding gap that could grow to about US$40 million between now and the end of 2003, the company announced Monday.

The news sent the company’s shares (ATTL) on a freefall, down almost 64 per cent to $0.21 in early afternoon trading.

AT&T Corp., which holds a 69 per cent economic stake in AT&T Latin America, issued its own statement Monday, saying that “AT&T Latin America’s current situation has no impact on AT&T’s ability to meet global business customers’ needs, whether those customers’ operations are based in or extend to the Latin America region.”

Moreover, AT&T Latin America announced it expects to be in noncompliance with financing agreements it has with equipment vendors Lucent Technologies Inc., Nortel Networks Corp. and Cisco Systems Inc. because of the expected revenue shortfall, said Lydia Rodr