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PSINet may sell unit
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February 15, 2001: 1:48 p.m. ET
Troubled ISP said to mull deal for credit card unit to fend off money problems
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NEW YORK (CNNfn) - Troubled Internet service provider PSINet Inc. plans to sell one of its more lucrative units for $325 million as a way to fix its financial woes, according to press reports Thursday.
Two firms are bidding for the credit card transaction unit, which was formerly known as Transaction Network Services. The unit accounted for about 14 percent of PSINet's third quarter revenue, the Washington Post reported.
Ashburn, Va.-based PSINet (PSIX: Research, Estimates) could not be reached for comment.
The Financial Times first reported news of the possible sale.
 PSINet's financial position is forcing it to consider low all cash offers, the Post said. In November, the ISP reported a stream of disappointing news, namely a need for a company restructuring, the resignation of its chief operating officer, and a warning of weaker-than-expected fourth-quarter results. However, the company posted a narrower-than-expected loss for the third quarter.
PSINet warned six months ago that it was running out of cash, with $1.38 billion in losses and $3.4 billion in debt, the Post said.
A sale of the unit would allow PSInet to continue into next year without fixing its financial problems. PSINet purchased the credit card unit in 1999 in a $720 million stock and cash deal. The current $325 million price tag is lower than $500 million analysts estimate the unit could fetch, the Post said.
Shares for PSINet have plummeted from their 52-week high of $60.93. PSINet gained 16 cents to $1.66 in midday trading Thursday. 
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