ASHBURN, Va. -- PSINet Inc. said co-founder William L. Schrader is stepping down as chairman and chief executive, as the struggling Internet provider looks to sell assets and restructure amid a severe cash shortage.
Harry G. Hobbs was named CEO. Mr. Hobbs was also named to the company's board. He has served PSINet (PSIX) in various capacities since 1997, most recently as president and chief operating officer.
In his new position, PSInet said, Mr. Hobbs will focus primarily on developing and executing a business plan aimed at moving the company through its restructuring.
Ian Sharp was named chairman. Mr. Schrader will remain a member of the board and serve the company in an advisory capacity, PSINet said.
In prepared remarks, Mr. Sharp called Mr. Schrader one of the "true pioneers" of the Internet. He added: "Given the changed circumstances within the marketplace and the company, we need to focus the company's efforts on preserving and enhancing this value. I am confident in our new team's ability to achieve this objective."
PSINet said Lawrence E. Hyatt, the company's executive vice president and chief financial officer, assumed the additional responsibility of chief restructuring officer, and will work closely with creditors. Kathleen B. Horne, executive vice president and general counsel, will also play an "integral role" in the restructuring efforts, the company said.
PSINet again said that its cash, cash equivalents, short-term investments and marketable securities aren't expected to be sufficient to meet the company's anticipated cash needs. The company and its advisers continue to analyze and pursue certain financial and strategic alternatives.
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