In the latest effort to distance itself from the accounting scandal that upended it last summer, WorldCom Inc. changed its name to MCI and relocated its headquarters to Ashburn, Va. from Clinton, Miss.
The company, which filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York last July, submitted a reorganization plan with the court Monday.
Since its “irregular” book-keeping practices were disclosed in June, the company has taken a series of steps to create a new image, including replacing its top executives and taking the resignations of several members of its board of directors.
Chairman and CEO Michael Capellas, who took the helm in November, said that the company plans to focus more heavily on the business data market, which he expects to drive revenue growth.
“Im quite certain what youre going to see is the data side of the industry continue to grow,” Capellas said in a teleconference Monday morning.
To gain a larger share of the small and mid-sized business market, the company will direct some of its enterprise initiatives at medium-sized businesses and promote home office services to smaller businesses, said Capellas.
For businesses closely watching the bottom line, WorldComs reorganization may not necessarily be beneficial, however. The highly competitive downward pricing that resulted from fierce rivalry among the largest telecom carriers is not likely to continue, according to Capellas.
“I think you will see price stabilization,” he said. “That is the natural evolution.”
Also Monday, the company named a new chief financial officer, Robert Blakely, who previously worked at Tenneco Inc. and Lyondell Chemical.
Capellas said that he expects the company to emerge from bankruptcy in September or October. Although it will have a significantly reduced debt following the reorganization, which many of its competitors consider unfair, Capellas said he does not consider the new MCI to be in a privileged position.
“This is what bankruptcy is for,” Capellas said. “The reality is that you had a really great company that suffered at the hands of a few.”
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