Few Bids for Global Crossing
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Global Crossing's July 24 asset auction, intended to help the company pull itself out of Chapter 11 bankruptcy protection without outside investment, may be in trouble, according to a report by the Wall Street Journal.
The Journal Thursday reported that the company had only received a handful of bids for some or all of its assets by the July 11 deadline. The bidders include Texas investor Richard Rainwater, backbone provider Level 3 Communications, Platinum Equity Holdings, Gores Technology Group, and a group of former Frontier executives.
According to the paper, none of the bids approach the money Global Crossing had hoped to raise in the auction. That may be attributed to the freefall the industry has found itself in since WorldCom's restatement of $3.8 billion in miscategorized expenses. Global Crossing has had similar troubles, as have other telecoms. Global Crossing has faced both Congressional and SEC probes into its accounting practices.
The Journal reported that Rainwater's bid resembles a bridge loan. It said the less than $300 million bid was complex, involving an offer for senior debt. Rainwater, known for value investing in real estate and energy, made his name trading distressed debt in the early 1990s.
The former Frontier executives are also interested in the Frontier network.
The only bid that would leave Global Crossing's network intact is a joint bid by Gores Technology and Platinum. The Journal reported that their bid involves a mix of cash, notes and equity.