On Eve of Decision, Global Crossing Still Selling

One day before Global Crossing executives meet with its bankruptcy judge,
reports surface of a potential winning bidder — long-time partner
Hutchinson Whampoa Ltd. and Singapore Technologies Telemedia Pte Ltd.

According to the Wall Street Journal, the Asian investment team is
almost a lock for majority ownership of the U.S.-based international
long-haul Internet provider. The two companies will reportedly take 62
percent of Global Crossing’s equity for approximately $500 million.

The price tag is much smaller than Hutchinson Whampoa and Singapore
Technologies original bid. In January, the two firms put in a $750
million bid
on majority ownership in Global Crossing. Both have a long
history with Global Crossing, notably through the carrier’s Asia Global
Crossing outfit.

John Legere, Global Crossing chief executive officer, has long said the
company’s problems have been a “balance sheet issue, not an operational
one.” If the reported Hutchinson-Singapore Technologies bid, which
involves less equity ownership, goes through, the money (roughly $12.55
billion) goes to the bankers and bondholder who invested in the company.

Executives gave potential investors plenty of time to put in a bid on
Global Crossing’s business, but today’s market for telecom buyouts is slim
indeed
. Analysts said the only real potential bidders were U.S.
incumbents, who are facing tough economic conditions themselves these days.

For a time, Legere was mulling selling
off pieces
of non-core Global Crossing assets to shore up its
substantial debt, an option that would have left it focusing on its
international long-haul network.

Problem is, according to experts, there are plenty of fiber companies on
the auction block in the U.S. and foreign companies only want particular
routes overseas.

Companies are still signing on for Global Crossing services, despite the
financial uncertainties, maybe even because of the difficulties. For only
$1.2 million, InterAmericas Conferencing Company (ICCI) signed a two-year
contract with the carrier Tuesday.

Legere, happy to announce any good news on the eve of a bankruptcy ruling,
said the contract gives ICCI reservation-less conferencing in North and
South America, and toll-free services around the world.

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