Pacific Crossing Files for Bankruptcy Protection

Asia Global Crossing Ltd.’s majority-owned Pacific Crossing, an undersea cable operator, filed for bankruptcy protection after sales on its fiber-optic networks slowed.

Pacific Crossing, which operates cable between Japan and the U.S., listed assets and debt of more than $100 million each in its Chapter 11 petition filed in U.S. Bankruptcy Court in Delaware.

Asia Global Crossing is 59% owned by Global Crossing Ltd.

A slowdown in sales and uncertainty about improvement led to the filing, Asia Global Crossing spokeswoman Madelyn Smith said. Instead of buying large contracts for capacity on the lines, companies are opting for less expensive short-term leases, she said.

Pacific Crossing, with headquarters in Los Angeles, also owes more than $700 million in senior secured debt, which it used to expand its network system.

“The market is distressed given the telecommunications slump,” Smith said. “The bankruptcy filing ensures that customer service is not cut off.”

Bermuda-based Asia Global Crossing owns 85% of Pacific Crossing. Marubeni Corp.’s Vectant owns the rest, Smith said.

Global Crossing sought Chapter 11 protection in January after amassing $12.4 billion in debt building a 100,000-mile fiber-optic network in 27 countries.

Pacific Crossing has hired investment bank Dresdner Kleinwort Wasserstein to help evaluate its options, the company said.