Global Crossing takes $8bn charge
Ouch!
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Global Crossing Ltd is to write down $8bn of goodwill for its fourth quarter of 2001, and has warned that further billions may have to be written down at a later, unspecified time.
The Hamilton, Bermuda-based company, which filed for Chapter 11 bankruptcy protection on January 28, has yet to file its fourth-quarter 2001 accounts, and is currently facing probes by the Securities and Exchange Commission and the Department of Justice into its accounting, particularly allegations of the use of capacity swaps with other carriers to bolster their top lines.
The write-down effectively removes all the goodwill on its balance sheet, and a future write-down would be against tangible assets that have fallen in value, such as its network.
The company has said that it has received expressions of interest from over 40 possible acquirers, and those that doubted it were corrected earlier this week when an email from the telecom's attorney inadvertently revealed their identities by placing their identities in the cc field instead of the bcc field.
Only two companies, Hutchison Whampoa and Singapore Technologies Telemedia, have signed a letter of intent saying they plan to make a bid, but the list of interested parties included Verizon, BT Group, Deutsche Telekom and Telefonica.
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