Saturday, 1 May 2004

Global Crossing in trouble again

During the Internet boom of the 1990s, Global Crossing built the world's most extensive high-speed fiber-optic network. In the Internet bust that followed, the company collapsed under $12.4 billion in debt. The US federal government last September approved its sale to ST Telemedia, the Singapore government-linked company that bought 61.5 percent of Global Crossing for US$250 million.

Global Crossing emerged from bankruptcy in December. But now, it faces more problems. On Tuesday, it reported that it expected to restate last year's results after underestimating access fees the company owes other telecommunication companies by US$50-80 million.

ST Telemedia says it is prepared to put up an additional US$100 million to keep Global Crossing afloat. However, analysts estimate that ST Telemedia, as the majority shareholder, may have to pump as much as US$250 million into Global Crossing this year to keep it in operation.

Global Crossing is proving to be quite an expensive acquisition for ST Telemedia.

1 comment:

Rocko Chen said...

Think they're still in trouble? I can't believe the freaking rally this week against the index dip.

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