Global Crossing in trouble (again)
Shares take a beating
Global Crossing shares lost a quarter of their value yesterday after the compay announced 600 job cuts and that it needs $40m funding to get it through the year. Global Crossing shares fell $4 to $11.88
The troubled telco, which only left Chapter 11 bankrupcy protection in December, is restructuring to move away from voice services towards higher margin IP services. It has organised a $100m bridging loan from ST Telemedia - the firm which helped it out of Chapter 11. But the firm said it needs an extra $40m by the end of 2004. Job cuts and other savings will reduce expenditure by about $41m to $47m.
In a statement, the company said it "expects it will need an additional $40 million of financing to fund its anticipated liquidity requirements through the end of 2004. The company will also need to refinance the Bridge Loan Facility at its maturity on December 31, 2004. Moreover, based on the company's current projections, the company will need to raise substantial additional financing to meet its anticipated liquidity needs beyond 2004."
Global Crossing has negotiated an extra $25m funding from a subsidiary of ST Telemedia to get it through November. The firm wants to restructure to focus on areas of "optimum future growth such as global IP enterprise offers, new carrier data offerings and additional means of distributing the robust suite of IP capabilities to all end users."
More details here. ®