The bankruptcy court signed off on a bid for Global Crossing’s fiber optic
network Friday to an investment team from Asia.
The deal, approved by creditors last night signals the end of debate over
who would take over the troubled carrier and the start of a major company
overhaul plan, to be filed with the courts next month. Executives plan to
emerge from bankruptcy in 2003.
Hutchinson Whampoa Ltd. and Singapore Technologies Telemedia Pte Ltd. have
been in the run for Global Crossing’s assets since earlier this year. The
deal was struck outside the boundaries of the auction, which was scheduled
for Wednesday and cancelled.
Executives were quick to allay any concerns created by the deal. Lee Theng
Kiat, president and chief executive officer of Singapore Technologies, said
customers don’t need to worry about the network going dark during the
transition.
“Our three companies will be able to provide continuity on Global
Crossing’s international networks and expanded service offerings to benefit
all our customers,” he said. “As the telecom market stabilizes, there will
be significant opportunities for the new Global Crossing, its creditors and
employees.”
Earlier this week, reports surfaced the Asian investors were the top
contenders for Global Crossing’s fiber network. Creditors had
originally balked at the Asia investment bid because it was too low for an
international long-haul data network.
The investment duo will have a 61.5 percent ownership stake in the new
Global Crossing, well below the 79 percent stake the two originally
sought. But the price of admission, $500 million, is also much lower than
the $750
million originally put on the table.
According to Global Crossing officials, the remaining 38.5 percent of
Global Crossing will go to creditors in the form of stock.
Global Crossing will retain ownership of three divisions — conferencing,
U.K. network and Global Marine. The 58 percent stake Global Crossing had
in Asia Global Crossing (a former subsidiary) is also transferred to
Hutchinson Whampoa and Singapore Technologies.
