The difficulty in financing the deal is just the latest wrinkle confronting Hicks, Muse, which has had much bad publicity in recent months over $1.3 billion in investments it made in six telecommunications companies last year and earlier this year.
Among the deals the firm has completed over the last couple of years are the purchase of a 20percentt stake in DPL, an Ohio utility, for $550 million, and investments in six telecommunications companies, averaging just $100 million to $200 million each.
Mr. Hicks is struggling to restore his and the firm's reputation after losing about $1 billion for his investors from minority stakes he took in six telecommunications and 13 Internet companies at the peak of the 1990's stock market bubble.
Officials at state-owned China Telecom traced the problem to a break in one telecommunications cable that links the Chinese cities of Shanghai and Guangzhou with Bandon, Ore., and San Luis Obispo, Calif.
Hicks Muse's reputation and market position were both damaged by the loss of over $1 billion from minority investments in six telecommunications and 13 Internet companies at the peak of the 1990s stock market bubble.
Connecticut's state pension plan is suing Forstmann Little & Company to recover more than $100 million the buyout firm invested in two unprofitable telecommunications companies, saying the stakes were unauthorized.
Over the last two years, Forstmann Little, which is led by Theodore J. Forstmann, has invested $2.5 billion in two struggling telecommunications start-ups: XO Communications and McLeodUSA.
"Two telecommunications towers fell.
Since 2005, he has overseen one of the most competitive national telecommunications markets in Europe, with three telecommunications and two cable TV operators selling broadband Internet and phone service.
They are notorious for kidnapping, and in one particularly violent case, in 1998, Chechens beheaded four telecommunications workers from Britain and New Zealand.
