Global Crossing to Emerge From Chapter 11, Sources Say

Global Crossing Ltd., whose bankruptcy filing two years ago cost investors $40 billion, plans to emerge from Chapter 11 protection as early as this week, people familiar with the matter said.

Singapore Technologies Telemedia, which is controlled by Singapore’s government, will own a 61.5% stake in the company after paying $250 million. Creditors will own the rest. Global Crossing also will announce the written-down value of its main asset, a worldwide fiber-optic network spanning 100,000 miles, the people said.

Global Crossing, which is based in Hamilton, Bermuda, and run from Florham Park, N.J., will emerge nearly debt-free as a competitor to Qwest Communications International Inc. and Level 3 Communications Inc. in a market where the cost of using a fiber-optic line between New York and Los Angeles has plunged 88% since 2000.

“The market is still very rough,” said Stephan Beckert, an analyst at Washington-based research firm TeleGeography. “People are still cutting prices.”

Global Crossing released financial results Monday that showed the company made a profit in 2002 after losing money the two years before that. The company has slashed half its workforce and is trying to sell more services.

Net income for 2002 was $635 million on revenue of $3.12 billion, the company said in a filing with the Securities and Exchange Commission. Global Crossing lost $25.7 billion for 2000 and 2001 on sales of $7.16 billion.

Singapore Technologies overcame a final hurdle in its acquisition last week by agreeing to pay $200 million in cash in lieu of notes to holders of bank debt including billionaire Carl Icahn and J.P. Morgan Chase & Co. The company is optimistic about completing the deal “very soon,” spokeswoman Melinda Tan said.

“Singapore Technologies acquired the asset at a very attractive price,” said To Chee Eng, a Gartner analyst in Singapore. “The next step is to build it into a viable business” by adding salespeople and services.

Global Crossing, founded in 1997 by Los Angeles billionaire Gary Winnick, amassed debt to build a network for sending data at speeds faster than with copper phone wires.

Sales growth slumped as the market became saturated and the U.S. economy slowed, leading the company to file for Chapter 11 protection in January 2002 with $22.4 billion in listed assets and $12.4 billion in debt.