XO Communications Inc., a telecommunications carrier that emerged from bankruptcy in January, on Friday made a bid valued at about $700 million to buy network services provider Global Crossing Ltd., exceeding a bid by an Asian firm that had wanted to close the acquisition by the summer or early fall.
Led by billionaire Carl Icahn, XO said the bid would put an additional $100-plus million in the hands of creditors compared to a bid by Singapore Technologies Telemedia Pte Ltd. ST Telemedia has agreed to invest $250 million in Global Crossing for a 61.5 percent stake in the company. Banks and creditors would receive the remaining ownership interest.
Global Crossing declined comment on the XO bid and an ST Telemedia spokesman did not immediately respond to a request for comment.
XO, of Reston, Va., made the offer directly to the advisors for the bondholders, banks and the company.
“It is our intent to provide each of Global Crossing’s banks and bond claim holders with the same amount of cash and new notes as in the current plan, and to increase the equity consideration received by each by over $50 million,” said Icahn, XO’s chairman, in a statement released Friday.
ST Telemedia had previously agreed to split the investment with Hong Kong-based Hutchison Whampoa Ltd. However, Hutchison dropped out of the bid following national security concerns in the United States.
As of last month, Global Crossing still had to notify regulators in the United States and abroad regarding the ownership change.
Global Crossing filed for bankruptcy court protection in January 2002, listing $12.4 billion in debt. Under its restructuring plan, it will emerge with $200 million in debt.
The company generates roughly half its revenue through other service providers, the other half through enterprise customers.
For April, the most recent monthly operating report filed with the bankruptcy court, Global Crossing reported a consolidated net loss of $75 million off $228 million in consolidated revenue. The company ended the month with $584 million in restricted and unrestricted cash.
