Global Crossing Ltd. is preparing a company-sponsored restructuring plan that would include asset sales and an equity investment as an alternative to bids it anticipates receiving from independent investors.
“Our proven ability to meet the financial and operating targets in the business plan we presented to the creditors’ committee has given Global Crossing restructuring alternatives that were not available to us when we approached a Chapter 11 filing,” said chief executive John Legere in a statement Tuesday. “We believe that is now entirely feasible to fund a restructuring plan through asset sales and through a smaller equity investment than originally anticipated.”
Global Crossing, which has listed $12 billion in debt, said management was working with investors in a consortium bid. The carrier noted it was evaluating bids for the purchase of Global Marine Systems, its domestic U.K. network and conferencing businesses.
Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd. confirmed over the weekend ending talks to make a final bid for Global Crossing. In January the companies inked a letter of intent to make a $750 million bid for Global Crossing, but creditors reportedly considered the offer too meager for a carrier that valued its assets at $22.4 billion.
Hutchison Whampoa and Singapore Technologies said in a statement Sunday their “views on the terms of the transaction for Global Crossing differed from those of the banks and creditors.” The companies, which still may bid for Global Crossing later this summer, would have secured a breakup-fee and other bidding protections had they reached a definitive agreement.
Global Crossing has noted more than 60 potential investors have expressed interest in the company. Companies interested in vying for Global Crossing must deliver written copies to the carrier and its law and advisory partners by 3 p.m. (EST) June 20.
An auction is scheduled for July 8.
Despite recording one of the largest U.S. bankruptcy filings, the company announced signing 475 new contracts and renewals in the first quarter.
Global Crossing expects to post first quarter revenue of $788 million and cash balance of roughly $894 million. The company let go 2,000 employees and closed 181 offices during the first quarter and expects to close 217 offices by the end of the year, resulting in annualized savings of $121 million.
