In light of a new probe by the U.S. government's Committee on Foreign Investment, Hutchison Telecommunications decided to withdraw its proposed acquisition of a 30.75% stake in Global Crossing. Singapore Technologies Telemedia will exercise its rights to acquire Hutchison Telecommunications' planned stake in a newly constituted Global Crossing. Specifically, ST Telemedia will increase its original investment from $125 million to a total $250 million for 61.5% ownership interest in the reorganized Global Crossing upon its emergence from Chapter 11. Global Crossing said the new arrangement would not change distributions to creditors under its existing Chapter 11 Plan of Reorganization filed with the courts.
Hutchison Telecommunications is a subsidiary of Hutchison Whampoa, a multinational conglomerate based in Hong Kong. ST Telemedia is a major shareholder in Singapore's second largest telecommunications company, StarHub; Indonesia's second largest telecommunications operator, PT Indosat; and Equinix, which provides Internet exchange and infrastructure services in the US and the Asia-Pacific region.
The Committee on Foreign Investment is managed by the Treasury Department and includes input from a number of Defense Department and Justice Department agencies.
http://www.hutchison-whampoa.com
- In February, IDT, a multinational carrier, announced a bid to acquire Global Crossing, arguing that national security issues were raised by the proposed deal with Hutchinson and Singapore Telemedia.
On 17 December 2002, a U.S. bankruptcy court confirmed Global Crossing's Chapter 11 plan of reorganization. Global Crossing said that it expected to emerge from Chapter 11 as a reorganized company during the first half of 2003. Various regulatory agencies need to review and approve the transaction for it to take effect.
In August 2002, Hutchison Telecommunications (Hutchison) and Singapore Technologies Telemedia Pte. Ltd. (ST Telemedia) announced plans to invest a total of $250 million for a 61.5% majority interest in a newly constituted Global Crossing. The agreement was approved by the bankruptcy court in New York and has the support of Global Crossing's major creditor groups. Global Crossing's banks and creditors would receive 38.5% of the common equity in the newly constituted Global Crossing, $300 million in cash and $200 million of new debt in the form of senior notes. In January 2002, Hutchison Whampoa and Singapore Technologies Telemedia had initially bid a total of $750 million cash for a joint majority stake in Global Crossing's equity.
