Global Crossing - Foreign Government Ownership Of US Telecoms Advances One Step Further

Yahoo/Dow Jones ^ | Nick Baker

[pttttt]

Yahoo! News   Sun, Jul 06, 2003

Global Crossing Wins Telemedia Talks Bid Tue Jul 1, 4:26 PM ET

By NICK BAKER, Dow Jones Newswires

NEW YORK - Bankrupt telecommunications company Global Crossing Ltd. on Tuesday won its bid to continue exclusive talks to be bought by Singapore Technologies Telemedia Pte. Ltd.

The decision, issued in court by Manhattan federal bankruptcy Judge Robert E. Gerber, represents a loss for XO Communications Inc. and other suitors who've been blocked by the court-mandated exclusivity period. The judge agreed to extend that period until Oct. 28.

XO, which financier Carl Icahn bought out of bankruptcy last year, has been aggressive in trying to win control of Global Crossing. XO said Monday that it now owns 36 percent of the $2.21 billion in debt that had been held by Global Crossing's banks. XO offered last week to buy all of these secured loans for 22 cents on the dollar.

Michael F. Walsh, a Global Crossing attorney, said after the hearing that the firm's board believes all of XO's offers are inferior to the ST Telemedia deal. But he said board members would evaluate a sweetened offer from XO.

ST Telemedia agreed earlier this year to pay $250 million to purchase a 61.5 percent stake in Global Crossing. But the deal has been held up by U.S. authorities over security concerns. ST Telemedia is owned by the Singapore government.

Global Crossing, based in Florham Park, N.J., runs a 100,000-mile, fiber-optic network.

IDT Corp. and Level 3 Communications Inc. have also expressed an interest in Global Crossing.

Judge Gerber ruled that Global Crossing exercised good business judgment in choosing to stick with the ST Telemedia deal. He also stated that his decision didn't hinge on whether Global Crossing will get approval for the deal from the Committee on Foreign Investment in the United States.

"While there are still a number of steps required, we believe we've made a major step forward today in our progress toward emergence from Chapter 11," Global Crossing Chief Executive John Legere said in a statement released after the 2 p.m. EDT hearing.

Icahn couldn't immediately be reached for comment. He listened to the Tuesday hearing by telephone.

 

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[pttttt]

Something stinks about this. The creditors would get more of their money bank with Icahn's bid but the bankruptcy court wants to make sure a foreign government gets this large, multi-billion-dollar chunk of US telecommunications - for the original chump change they bid on it.

Thanks to this ruling, the foreign government has the exclusive right to do that.

[BenR2]

Something stinks about this.


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Big time.

[Cacique]

Nah, it's just part of the greater scheme of things of globalisation. Everything in the US is for sale or export, jobs, secrets, technology, sovereingty, our corporations. Next week we will be holding an auction to sell Hawaii, California, Alaska, the Louisiana territory. Oh and yes, we are giving the Southwest back to Mexico. Ain't free trade great?

[Cacique]

ping

[pttttt]

ST Telemedia agreed earlier this year to pay $250 million to purchase a 61.5 percent stake in Global Crossing.

According to various reports, their fiber optic network plant was valued as high as $22B. About one cent on the dollar.

Pretty good deal for the foreign-government buyer. Not exactly the best deal for the creditors. Icahn offered more ($750M). Lot of swing in those numbers. Probably enough to influence a federal bankruptcy judge, maybe a few Senators, a Richard Perle, etc.