Monday, December 3, 2001

Finance

Arch Wireless files Chapter 11

By Alexander Soule

Arch Wireless Inc., a paging company based in Westborough, filed for Chapter 11 protection from creditors as it tries to regain financial stability.

The move comes more than a year after the company acquired PageNet in a $1.2 billion stock swap. While paging still accounts for the bulk of Arch's business, the company has been trying to develop two-way messaging services as well.

Arch is restructuring $300 million in existing debt, and it is borrowing $50 million from a group of banks led by TD Securities Inc. It has about $50 million in cash.

For its most recent quarter, Arch lost $95.8 million on sales of $271.7 million. The company cut its loss per share in half to 52 cents per share from the same quarter in 2000.

The company will file a plan of reorganization with the U.S. Bankruptcy Court's western Massachusetts division by Jan. 15. Arch said that it expects to operate in the normal course of business during the reorganization proceeding.

Earlier this year, Arch was delisted from the Nasdaq stock exchange. Since then, its stock has plummeted from about $1 per share to less than two cents.