Maxwell's Telemonde in sales dive

THE efforts of Kevin Maxwell's telecoms firm Telemonde to stave off bankruptcy have been dealt another blow. The company, which Maxwell chairs, has revealed it suffered a collapse in revenues in the first quarter of the year. During that time it generated sales of less than $1m (£654,000) compared with $8.2m for the same period of 2001.

The company lost $1.1m in the quarter, down from $2.7m last year, as the struggling New York-based company slashed its cost base, according to documents filed with the US Securities and Exchange Commission.

Telemonde, set up by Maxwell to buy and sell telecoms bandwidth, has racked up total losses of $191m since it was founded in 1998.

The first-quarter report also reveals that its total liabilities of $119.5m include $17.3m owed to WorldCom, the telecoms giant struck by a huge fraud scandal. Telemonde bought bandwidth contracts from WorldCom in 1998 and 1999, on which Maxwell's company has defaulted.

The first-quarter report to shareholders said 'illiquidity remains the key challenge' facing Telemonde and that it needed the 'forbearance' of its creditors to survive. One subsidiary, the Swiss-based Telemonde.net has already folded.

Maxwell, 43, once boasted that the company could be worth $1bn. He hoped it would be his vehicle for restoring his reputation after the spectacular collapse of his father Robert's business empire more than a decade ago. On Thursday the shares were trading at only 0.3 cents on the US over-the-counter market, valuing Telemonde at $370,000.

The company was built up rapidly in the late 1990s through a series of acquisitions. One of its UK subsidiaries, Equitel Communications, has not filed accounts with Companies House since it reported on its 1999 figures and is eight months late in filing its 2000 accounts, a breach of UK company law.