Weighed down by heavy debts and unable to reach profitability, Excite@Home, the largest provider of high-speed Internet access, filed for Chapter 11 bankruptcy protection on Friday and said it will sell its network to AT&T for $307 million in cash.
“This filing is a tool to protect the value of the broadband business for the benefit of the company’s financial shareholders and will help reassure our customers that service will continue uninterrupted through the restructuring process,” said Patti Hart, Excite@Home chairman and CEO. The company has 1,350 employees.
The bankruptcy filing with the U.S. Bankruptcy Court for the Northern District of California is part of a deal with AT&T that calls for Excite@Home to become wholly owned by the long-distance giant by early next year. AT&T has no interest in retaining the Excite portal, which paired up with @Home in a $6.7 billion deal in 1999.
AT&T said that it will use Excite@Home’s high-speed network as the core behind a larger broadband network and AT&T Broadband. Excite’s 4 million subs should not experience an interruption in service.
Excite@Home closed at 13¢ Friday. In 1999, the stock peaked at nearly $100.