Failed telecommunications company Viatel has opened a Bermuda holding company in a bid to return to solvency.

Viatel Inc., which was the builder-operator-owner of a state-of-the-art pan-European network, issued a press statement this week to say it had entered into a corporate reorganisation plan.

In the statement, Viatel said the United States Bankruptcy Court for the District of Delaware signed an order confirming its Plan of Reorganisation, as filed on 28 February 2002.

The Bankruptcy Court approval follows last week's overwhelming acceptance of the company's reorganisation by approximately 97 percent in principle amount of the unsecured creditors of Viatel, Inc. and its United States subsidiaries.

Pursuant to the plan, the unsecured creditors will receive on a pro rata basis a total of 10,560,000 common shares of Viatel Holding (Bermuda) Limited - a new holding company created to effectuate the restructuring transaction.

As a result of the reorganisation, Viatel will emerge from bankruptcy debt free and will implement fresh start accounting, the rules of which will require Viatel to revalue its assets and liabilities to current fair value and reestablish stockholders' equity at the reorganization value determined in connection with the plan.

It is expected that the planned reorganisation will be consummated by the end of May.