Level 3 Hopes Buybacks, Other Help, Prevent Bankruptcy

If you’re signed up for Level 3 Communications Inc.’s (LVLT) financial alerts, you’ll have noticed in the past week a lot of activity targeted toward investors.

Turns out, the unprofitable carrier – unprofitable to the tune of $6 billion in debt – is looking to shareholders and stock buybacks to help it get through the recession. It just raised $400 million from investors. But as part of that deal, the Broomfield, Colo.-based company had to buy back some of its 2010 debt for 62 cents, up to 70 cents, on the dollar. This week, it just barely met those requirements. Level 3 also extended a third offer to buy back 2009 debt for another week.

The Rocky Mountain News reports analysts see the financial maneuvering as efforts to stave off near-term bankruptcy even as Level 3 tries to cut costs through layoffs and other means.

Still, the threat of bankruptcy looms if the markets don’t turn around, despite CEO Jim Crowe’s insistence that going under isn’t an option for Level 3.

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