KPNQwest to default on $1.8bn debt

One of Europe's largest carriers has warned that it may have to default on its $1.8bn debts.

KPNQwest said it was considering the move as part of a debt restructuring following a steep fall in profits.

KPNQwest has also warned that sales for 2002 were likely to fall below earlier expectations.

The company cited an "effective closure" of the infrastructure market and softening demand for lowering its projected sales to E1bn-E1.05bn ($893m-$937m), from previous estimates of E1.3bn.

Qwest Communications, which jointly owns the company with Dutch telecoms operator KPN, would not comment on the move or indicate if it was going to inject additional capital into the company.

Analysts were concerned that Qwest, which holds a 47 per cent stake in the company, was not interested in providing the company with more cash.

Qwest has more than $24.9bn in debt and is looking to raise more than $10bn to sell some of its regional telephone directories.