Hutchison, ST buy Global Crossing

Shareholder wipeout

Global Crossing, the stricken US carrier, is to have Hong Kong and Singapore owners, after its sale was approved by the New York bankruptcy court.

Hutchison Telecommunications and Singapore Technologies Telemedia are to take a 61.5 per cent stake in the US firm following its emergence from Chapter 11.

Global Crossing US will now retain its UK national business, its conferencing division, and Global Marine, all previously up for sale to conserve cash.

The deal will see Global Crossing's existing shareholders wiped out, so there could be some legal challenge on this front.

But the banks and creditors emerge quite well and are supporting the takeover. They get 38.5 per cent of the equity in the 'newly constituted' Global Crossing and $300m $300 million in cash and $200 million of new debt in the form of senior notes.

As a result of the agreement, Global Crossing will no longer conduct an auction for its assets, originally pencilled for August 14.

Global Crossing filed for Chapter 11 in January this year. ®

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