KPN makes prelim bid for KPNQwest assets

AMSTERDAM: Dutch telecom firm KPN has made a preliminary offer for most of

the assets of failed data communications carrier KPNQwest and a formal bid is

imminent, a source close to KPNQwest's creditor banks said on Sunday.

"We have received a letter -- technically you could say this was a bid

-- but the letter is still being reviewed and many details must be worked out

before you can call this a formal bid," the source said. The source

declined to give any details of the letter but said that he expected a formal

offer shortly.

"We are at the stage where a formal bid is imminent...but we are still

speaking, and I guess that we will still be speaking in the morning," he

added. KPN was not available for comment but a source close to KPNQwest's

creditor banks said on Friday that the Dutch telecom was set to submit a formal

offer of 20 million euros for the "KQ Network" after all other

potential bidders dropped out.

That would be less than one tenth of the amount the banks were hoping to

recoup. The KQ Network consists of the fiber optic network rings in Britain, the

Netherlands, Germany, and France, as well as a transatlantic fibber link and a

network operations center.

The source said then that the bid excludes the 10,000 kilometer Ebone

network, bought by KPNQwest in March, and the Central European network.

KPNQwest's entire pan-European network totals 25,000 km.

KPNQwest was declared bankrupt in May after it said it would run out of money

in June. Its major shareholders, KPN and Qwest Communications resigned from its

board and banks turned down a request for more funding. The company accumulated

2.2 billion euros of debt by expanding its network at the height of the telecom

bubble and has lost 42 billion euros of shareholder value in the last two years.

(C) Reuters Limited.