SBC Pumps $150M Into Covad

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Covad Communications Co. will get a $150 million funding boost from SBC
Communications Inc. as it pilots its way through Chapter 11 bankruptcy.

Under an agreement struck Tuesday, the regional Bell operating company will
pay $75 million upfront; supply a $50 million, four-year loan; and pay $10
million to eliminate revenue commitments under SBC's existing resale and
marketing agreement with Covad. SBC will also eliminate $15 million in Covad
debt.

The ailing competitive digital-subscriber-line carrier filed for bankruptcy
protection in August as it tries to eliminate approximately $1.4 billion in
debt.

With the SBC deal and further cost reductions, Covad is now predicting that
it will emerge from Chapter 11 and reach cash-flow-positive sometime in late
2003.

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