Global’s Creditors Seek Alternatives
Global Crossing Ltd. creditors favor a plan to let the fiber-optic network operator remain independent after emerging from bankruptcy, rather than an offer from Hutchison Whampoa Ltd. and another Asian company.
“We’re much more excited about the prospect of a stand-alone restructuring than the Hutchison-ST Telemedia offer,” said Edward Weisfelner, a lawyer representing the creditors committee.
The plan considered by creditors involves injecting $300 million to $500 million into Global Crossing. Weisfelner declined to comment. Global Crossing spokeswoman Cynthia Artin also declined to comment.
Hutchison Whampoa, owned by billionaire Li Ka-shing, and Singapore Technologies Telemedia had until Tuesday to make a formal offer to buy 79% of the company, which is based in Bermuda and run from offices in Madison, N.J.
The companies may miss that deadline.
If Hutchison and ST Telemedia miss the deadline, they may forfeit the right to a breakup fee of $30million that an alternate buyer would have to pay to scuttle their offer.
The companies remained in discussions through late Tuesday, representatives of Hutchison and ST Telemedia said.
Global Crossing filed for Chapter 11 protection from creditors Jan. 28, listing $12.4 billion in debt and saying Hutchison and ST Telemedia would pay $750 million for the stake. Creditors say the bid is too low and prefer a higher offer or a plan to infuse cash into Global Crossing in exchange for ownership of the restructured company, a lawyer for the creditors said.
More than 60 investors have expressed interest in Global Crossing’s assets, Chief Executive Officer John Legere said earlier this month. Prospective bidders have until June 20 to submit an offer.
If more than one bid is received, Global Crossing’s lawyers will hold an auction July 8. The restructuring plan will be considered along with any bids.
“Any number of other bidders could turn the auction very competitive,” Weisfelner said. “We have a couple of very exciting strategic bidders as well as some financial players.”
Private equity firms Texas Pacific Group and Gores Technology Group also have considered bidding, people familiar with the companies have said. Platinum Equity also has said it’s interested in all or part of the 27-country network.
Other companies interested in Global Crossing include Verizon Communications Inc., BT Group and Deutsche Telekom, according to an e-mail sent to potential bidders by Global Crossing’s lawyers and published in the New York Times in April.
Verizon spokesman Peter Thonis declined to comment.
Fiber Optek Interconnect Corp., a closely held telecommunications company, on Monday disclosed details of its plan to reorganize Global Crossing, creating a company with a book value of $9.7 billion.
Under the plan, secured creditors would receive $250 million in cash and 28% of the company’s equity.
Hutchison Group Managing Director Canning Fok said in an interview last month that his company also may bid for Asia Global Crossing Ltd. The company, 59%-owned by Global Crossing, hired Lazard Freres to help raise money to stave off a cash crunch.
