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Hutchison Whampoa & Singapore Technologies Telemedia Plan to Invest $750 Million In Global Crossing
Under the terms of the proposed investment, which is conditional on, among other things, the confirmation of a plan of reorganization by the courts before the end of August 2002, creditors would share in a combination of cash, new debt, and new equity in the restructured company. Existing common equity and preferred shareholders would not participate in the new capital structure.
John Legere, Chief Executive Officer of Global Crossing stated, "We believe this new equity investment from parties as strong as Hutchison Whampoa and Singapore Technologies Telemedia validates our confidence in the strong future of our company. This investment, along with the financial and operational restructuring that we're implementing, will strengthen our balance sheet and enable Global Crossing to build a sustainable business upon its existing unmatched global network. With this restructuring, we believe we can become the global leader providing networking services among the world's top 200 cities to global enterprises and carriers."
Mr. Legere said that business would continue as usual during the restructuring process. Employees will continue to be paid their wages and other benefits without interruption. Worldwide operations will be unaffected by the filing and customers will not experience any changes in their service.
"Ours is a balance sheet issue, not an operational one," Mr. Legere said, "and today's actions are intended to directly address this issue. Even with the financial uncertainty we've recently experienced, customers have continued to choose our network over many others. With this restructuring, we'll put financial uncertainty behind us and the power of our network will once again become the primary factor in the minds of our customers. Hutchison Whampoa and Singapore Technologies Telemedia are perfect matches for Global Crossing. They bring considerable financial resources and business acumen, which we are confident will add significant value to Global Crossing's prospects."
"With a strengthened balance sheet and reduced debt, we are confident that Global Crossing will be in an excellent position to take advantage of its unique global network, growing customer base, and outstanding service capabilities to create substantial value in the coming years. We are committed to an expedited restructuring process," Mr. Legere added.
Mr. Canning Fok, Group Managing Director of Hutchison Whampoa, and Mr. Lee Theng Kiat, President and CEO of Singapore Technologies Telemedia, said, "We are excited about the prospect of working with Global Crossing's management team and the opportunity presented by this transaction to develop and strengthen Global Crossing's business."
Hutchison Whampoa and Singapore Technologies Telemedia already have business relationships with Global Crossing and its affiliates. Asia Global Crossing and Hutchison Whampoa each own 50 percent of Hutchison Global Crossing, a leading telecommunications service provider in Hong Kong providing fixed-line, Internet and data services. Asia Global Crossing and a subsidiary of Singapore Technologies Telemedia each own 50 percent of StarHub Crossing, which owns and operates a high capacity backhaul network in Singapore.