Global Crossing is about to emerge from bankruptcy. The beleaguered carrier, which filed for Chapter 11 protection at the start of 2002, has received long-awaited approval from the Federal Communications Commission (FCC) to transfer majority ownership to Singapore-based ST Telemedia (STT) (see FCC OKs STT/GlobalX Deal).

Pending approval by the bankruptcy court, STT will finalize a 61.5 percent stake in Global Crossing for $250 million, by previous agreement. Global Crossing's network is estimated to have cost nearly $4 billion to build, based on SEC filings.

The approval marks the end of a long struggle that started in May 2003, after an original plan for the carrier's emergence fell through. STT increased its proposed stake in Global Crossing after another suitor, Hutchison Whampoa Ltd. (Hong Kong: 0013), pulled out of the deal, reportedly because some in the U.S. government were uncomfortable selling such a large U.S. company to a Chinese conglomerate (see What's to Become of Global Crossing?).

It was just the first of many snags, including an aggressive attempt by Carl Icahn, the chairman of XO Communications Inc. (OTC: XOXO), to stake a winning bid of his own (see Court Chills Icahn's Global X Bid). A tentative bid also reportedly came from Level 3 Communications Inc. (Nasdaq: LVLT) but soon evaporated.

Global Crossing sent its petition to merge with STT through a series of government approvals that included a presidential signoff and culminated in the FCC nod this week.

The debate about the sale has been over whether control of such a large network in the U.S. should be ceded to a non-U.S. company. Despite political arguments for and against, it seemed the best hope for Global Crossing's future lay in Asia-based control, because the key value of its network lies in its links from Asia to the U.S.

Spokespeople for Global Crossing can't say when the bankruptcy court will approve the final sale, or when the carrier will officially reemerge. But the company's prepared statement says it should all happen "shortly."

— Mary Jander, Senior Editor, Light Reading