Global Crossing Wins Bid for Talks

Troubled telecommunications company Global Crossing Ltd. on Tuesday won its bid to continue exclusive talks to be bought by Singapore Technologies Telemedia.

The decision, issued by U.S. Bankruptcy Judge Robert E. Gerber, represents a loss for XO Communications Inc. and other suitors who have 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% 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% 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. also have expressed an interest in Global Crossing.

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 would get approval for the deal from the U.S. Committee on Foreign Investment.

“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.

Icahn couldn’t immediately be reached for comment.