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Global Crossing deal hits stormy waters

Investors' lawsuit complains of share deal's 'bargain basement prices'

vnunet.com, 04 Feb 2002

Ailing telecoms firm Global Crossing is facing a lawsuit that could derail its planned rescue.

Investors in the firm issued a class-action lawsuit against Global Crossing last week, complaining that the company's initial agreements with Hutchison and Singapore Technologies Telemedia (STT) would transfer billions of dollars of shares at "bargain-basement prices".

Last week, Global Crossing announced the deal with Hutchison and STT - a $750m cash offer in exchange for 60 per cent of the carrier - at the same time it filed for Chapter 11 bankruptcy protection.

The lawsuit alleged Global Crossing's executives' action "deprived shareholders of the equity in the company".

Global Crossing has the world's largest submarine cable network and total assets of more than £15.8bn ($22.4bn). It also has debts totalling £8.8bn ($12.4bn).

reader comments

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