Global Deal May Benefit Subsidiary

A deal for the assets of fiber-optic network builder Global Crossing Ltd. also could solve the cash crunch at its troubled majority-owned subsidiary, Asia Global Crossing Ltd., according to sources familiar with late-developing efforts to bail out both operations.

Global Crossing, which is close to picking a winning bid for its assets, is trying to emerge from bankruptcy reorganization as an independent company. Asia Global, which ran into deep trouble when its parent company reneged on a promised $400-million cash infusion last fall, is trying to avoid a bankruptcy filing.

Hutchison Whampoa Ltd., which had been part of an early bid, now withdrawn, for Global Crossing, is back in the hunt for the company’s assets, sources said Wednesday.

Hutchison, controlled by billionaire Li Ka-Shing, also is believed to be one of three companies interested in taking over Asia Global, which is 59% owned by Global. Hutchison partnered with Asia Global in three overseas ventures until earlier this year, when Hutchison bought out Asia Global’s stakes for $120 million.

Only China Netcom Communications Group Corp., that nation’s second-largest fixed-line telephone company, has acknowledged that it is bidding for Asia Global.

Hutchison joins two other companies in the Global Crossing bidding process, each pushing deals that value the company at $1 billion to $2 billion, sources say.

Los Angeles buyout firms Gores Technology Group and Platinum Equity, run by brothers Alec and Tom Gores, have submitted a joint bid for Global’s network, which connects more than 200 cities in 27 countries. And David Walsh, a former Global president and chief operating officer, is leading a group that includes One Equity Partners, the venture capital unit of Bank One Corp.

In addition, rival telecommunications firm Level 3 Communications Inc., which last month received a $500-million investment backed by billionaire investor Warren Buffett, has submitted a bid for a large portion of Global Crossing’s business. All parties are refusing to comment on their roles in Global’s bidding process.

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Reuters was used in compiling this report.