Global Crossing Breathes Again

Global Crossing Holdings Ltd. (Nasdaq: GLBC) dug itself out of a hole today by announcing $350 million in debt financing through a private placement with institutional investors that it expects to complete during the next two weeks (see Global Crossing to Raise $350M).

The carrier needed the cash to refinance a $125 million bridge loan organized by its 61.5 percent shareholder, Singapore Technologies Telemedia Pte. Ltd. (STT), to pay off debts, and to provide long-term liquidity.

The carrier's stock shot up $1.03, more than 7 percent, to $15.47 on the news, valuing the operator at $340 million.

A spokesman for the carrier said he was restricted by Securities and Exchange Commission (SEC) from commenting further on the news, and couldn't say whether the operator needed any further funds to see it through to profitability.

In its third quarter, Global Crossing recorded a net loss of $102 million. Its revenues were $617 million, down from $648 million in the previous quarter, and from $696 million a year earlier.

In turn, the carrier is cutting 600 staff by next March in an effort to reduce costs.

The operator has had a troubled year, having staved off delisting from Nasdaq as it battled to file financial restatements for 2003 and provide financials for the first half of this year (see Global Crossing Files Results and Global Crossing Granted Extension).

Separately, Global Crossing's ex-CEO Gary Winnick is among four former executives expected to be charged and fined by the SEC for alleged accounting fraud as Global Crossing slid towards bankruptcy with $12.4 billion in debt, according to The Wall Street Journal (see Global Crossing Falls Overboard and Winnick Walks). The carrier emerged from Chapter 11 protection in October 2003 (see Global Crossing Emerges From Chap 11).

The carrier is not due to be charged, nor is it commenting on the case.

— Ray Le Maistre, International News Editor, Light Reading

edzed 12/5/2012 | 12:59:44 AM
re: Global Crossing Breathes Again Maybe the author knows something we don't, but the PR from Global Crossing says that they are PLANNING to sell $350MM in notes. It does not say that they completed the financing., nor did they disclose terms in the PR or in an SEC filing, likely indicating that nothing has happened yet. The company acted like it was a done deal when they initially filed their reorg plan. Two months later and still no money.

The company is on track to run out of money within a month, assuming no further financing. Not surprisingly, the PR came out just ahead of next week's annual meeting, where shareholders will be asked to approve new compensation schemes for CEO Legere and his management posse.

Could we please get the LR article author to clarify whether Global Crossing actually has commitments for the $350MM?

This information has ramfications for equipment vendors, access providers, etc.. Thanks in advance.
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