Global Crossing files for Chapter 11 bankruptcy protection
Monday, January 28, 2002 03:11 PM GMT
HAMILTON, Bermuda, Jan 28, 2002 (AFX-Asia via COMTEX) -- Global Crossing Ltd said it has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York and coordinated proceedings in the
Supreme Court of Bermuda.
In a statement, the company said the filing is part of a restructuring process aimed at improving the Global Crossing's balance sheet position.
Chief executive officer John Legere said: "Ours is a balance sheet issue, not an operational one, 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," he added.
Legere insisted that company's operations will be unaffected by the filing and that employees will continue to receive their wages.
Global Crossing also said it has secured a 750 mln usd cash financing from Hutchison Whampoa Ltd and Singapore Technologies Telemedia Pte Ltd for a joint majority stake in the company's equity.
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, 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.