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Qwest Names New CFO Amid Probe

Telecom: The company also is reorganizing its operations as it faces pressure to avoid cash crunch.

July 08, 2002|From Reuters

Local telephone company Qwest Communications International Inc., which faces a federal investigation into its accounting practices, said Sunday it named Oren Shaffer as its new chief financial officer and vice chairman, and reorganized its operations to focus on consumers, businesses and wholesale customers.

The move comes just three weeks after the No. 4 U.S. local telephone company ousted its former chairman, Joseph Nacchio, and replaced him with Dick Notebaert, who headed telecommunications equipment maker Tellabs Inc.

Denver-based Qwest, the dominant local phone company in 14 states from Minnesota to Washington, has been under pressure for months as it scrambled to relieve a cash crunch. Credit rating agencies have slashed the company's debt to "junk" status, and the Securities and Exchange Commission is probing its accounting practices.

The company also has put up for sale several assets, including its $9-billion QwestDex telephone directory publishing business, which is slated to get a second round of takeover bids this week, sources familiar with the situation said.

Shaffer, 59, who replaced CFO Robin Szeliga, previously served as president and chief operating officer of Sorrento Networks Corp., a maker of optical products, and worked as a business consultant.

From 1994 to 2000, Shaffer served as CFO of Ameritech, the local telephone company acquired by SBC Communications Inc., where he served under Notebaert. Before that, he spent 25 years at Goodyear Tire & Rubber Co., where he was CFO and a member of the board of directors.

Szeliga will remain with Qwest as an executive vice president focusing on reducing the company's $26.6 billion in "junk"-rated debt.

"Today's organizational changes will bring greater focus to our efforts to meet the needs of our customers and streamline the company for the key priority of retaining and growing our business," Notebaert said.

Qwest, which said it may make additional management changes, expanded the responsibilities of its president and chief operating officer, Afshin Mohebbi, who will oversee all of Qwest's operating units.

The company also restructured its various business units. Its residential, wireless, cable and video businesses have been combined as the consumer markets group under Executive Vice President Annette Jacobs, who was formerly responsible for the wireless business.

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