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Mergers & acquisitions

Global Crossing Finally Sold

Much ado about nothing. That sums up all the back and forth, the slips of the tongue, the canceled deals and postponed auctions for Global Crossing Holdings Ltd. It turns out it's being bought by the exact same companies that tried to buy it right after it filed for bankruptcy in January (see Global Crossing Finally Sells).

After postponing the auction for the company’s assets six times in the past months, Global Crossing announced today that it had finally canceled the auction and sold its network to the original bidders: Hutchison Telecommunications (Hong Kong) Ltd. (owned by Hutchison Whampoa Ltd.) and Singapore Technologies Telemedia Pte. Ltd. (STT) (see Global Crossing's Asset Limbo).

Both the price and the structure of the deal have changed substantially since the original offer. Hutchison and STT are now proposing to invest $250 million for a 61.5 percent stake in the company. In January, the consortium offered $750 million for 79 percent, but the company’s creditors rejected the offer in May, hoping to get more for the fiber optic network that cost $7 billion to build out (see GlobalX Talks Fall Through and Global Garage Sale Coming? ).

The company’s banks and creditors will hold on to the remaining 38.5 percent of Global Crossing and will get $300 million in cash and $200 million in bonds. And the banks, which have lent the company more than $2.5 billion, are getting a far better deal than the company's other creditors. According to a Global Crossing spokesperson, the banks will get all the cash and $175 million of the bonds in the restructuring. The current shareholders of common stock in the company will be left with... well, nothing.

The deal has been approved by Global Crossing's creditors and the bankruptcy court in the Southern District of New York, but the company doesn't expect to reemerge from bankruptcy until early next year.

“Many bids were received,” says John DeBellis, a spokesperson for Global Crossing. “Global Crossing chose the one which best met the needs of a global telecommunications company with a worldwide IP network.”

The network links 200 cities in 27 countries. At its height, Global Crossing’s stock was worth $48 a share (see Global Crossing Falls Overboard).

When Global Crossing filed for the fifth largest bankruptcy in U.S. history on January 28, the company was loaded down with more than $12 billion in debt.

According to a company press release today, the new agreement will allow Global Crossing to retain its U.K. national business, its conferencing division, and Global Marine, three businesses it had previously considered selling to bring in some much needed cash.

Global Crossing is expecting to emerge from the Chapter 11 process early next year, and, according to a fact sheet on its Website, the company expects that it will remain a separate entity, with Hutchison and STT as the controlling shareholders.

— Eugénie Larson, Reporter, Light Reading
http://www.lightreading.com
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Nomoredemo 12/4/2012 | 9:58:35 PM
re: Global Crossing Finally Sold And i tought i was way too high by bidding my Wayne Gretzky rookie card...
willywilson 12/4/2012 | 9:58:25 PM
re: Global Crossing Finally Sold It should be pointed out that IP networks in a worldwide setting have a questionable value. There is almost no chance that VoIP would be adopted any time soon.

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I tend to agree, Bobby, with one POSSIBLE reservation. Seems to me that if IP networks can develop full-duplex QoS and implement this in VPNs, this would be the nucleus of adding some economic value with an IP network be it global, national, regional or just across the home county.

Of course, the Silicon Valley fraudsters have been lying about this for many years, i.e., RSVP, DiffServ, MPLS, you name it. You seem to have a good, cynical, accurate view. So what do you think about this idea and what do you think the time frame is in PRACTICAL implementation?
BobbyMax 12/4/2012 | 9:58:25 PM
re: Global Crossing Finally Sold It should be pointed out that IP networks in a worldwide setting have a questionable value. There is almost no chance that VoIP would be adopted any time soon.
strands555 12/4/2012 | 9:58:24 PM
re: Global Crossing Finally Sold Since when does the value of IP networks hinge on worldwide deployment of VoIP?

That is kind of like saying the value of cars is questionable because there is almost no chance they will be adopted worldwide as a replacement for trains.
cyber_techy 12/4/2012 | 9:58:22 PM
re: Global Crossing Finally Sold It isn't a mathematical impossibility though. Every thing in life has a questionable value
rjmcmahon 12/4/2012 | 9:58:11 PM
re: Global Crossing Finally Sold Since when does the value of IP networks hinge on worldwide deployment of VoIP?

That is kind of like saying the value of cars is questionable because there is almost no chance they will be adopted worldwide as a replacement for trains.
________________

Or it's like a railroad union leader claiming that interstates have no value. Union members who were fooled by these denials found themselves facing detoriating economic conditions.

The value of networks is difussed to the many. This makes networks difficult to monetize by any one group. Our roads are similar in this respect. Previous generations understand this and they did the right thing by building our roads. (Imagine a modern society without roads. These union-thinkers would profess that as the right thing to do because it preserved their union jobs.)

The problem with protectionist thinking is that it denies progress. Those that deny progress can only fall further behind.

PS. The HDTV problem would disappear if our networks supported unicast bit distribution which reflected real costs. FCC Powell could then forget about requiring consumers to buy expensive tuners, most of which will go to landfills and never be used.
strands555 12/4/2012 | 9:58:11 PM
re: Global Crossing Finally Sold re: The HDTV problem would disappear if our networks supported unicast bit distribution which reflected real costs.
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Which of the many problems/issues related to HDTV are you referring to?

Cable guys will not provide HDTV--except at some FCC-appeasing minimalist level. They can fit 8-10 other (standard definition) channels in the space required to deliver a single HDTV channel. Telcos will obviously not provide it either, since it would cost them billions in network rebuild to support such rates.

There is no proportional revenue increase for delivering HDTV channels that consume roughly 10x the bandwidth of a standard-definition digital channel. These legacy operators live by perpetuating the bandwidth scarcity myth and therefore will not provide it.
rjmcmahon 12/4/2012 | 9:58:10 PM
re: Global Crossing Finally Sold Which of the many problems/issues related to HDTV are you referring to?
______________________

I am referring to individual consumer choice of content and playback quality, regardless of any neighbors choices. Think of today's streaming over fraudband and then imagine a world with real broadband. Tear down those walled gardens imposed upon us by our cable companies and we will all have the freedom to choose the "D" in our TV.
sntwk 12/4/2012 | 9:58:03 PM
re: Global Crossing Finally Sold uni-cast asymetric or multicast asymetric bit-stribution - for DTV didn't materialize even though many millions of users have broadband (cable/dsl) today than before. No independent tv network/program providers have started tv on internet yet. So what makes you think uni-cast/uni-directional asymetric bit-distribution would have taken care of HDTV?

Mandating that Digital tuners be a must and Cable operators start compulsory digital transmission is the right thing. A digital signal as originated by networks such as ABC, CBS , ESPN has more usefull applications than the analog to digital conversion the local cable head end does which is a foolish thing currently done by such operators as AT&T- they sell you digital Set-Top-Box and send you digital channels wich very well could have been analog. If the original signal is digital and carried interactive data as well as some local data added by local cable operator such as advertisements/infomercials that would provide more useful trigger for many things to come.

All in all FCC rule (if forced on them) makes it compulsory for cable operators, network producers,tv manufacturers to start working towards digital TV and that would be a good thing for economy- there is lot of interesting applications that can be developed if digital TV signal distribution is in place. Once an open digital input is on the TV - who knows the network producers may start offering channels on the internet which currently they can't. For that to happen each home needs to have atleast 6-50 Mbps pipe which currently none of the access technologies can deliver. So the myth that internet can deliver SDTV/HDTV signal is baseless. For all network producers - they will continue to have agreements with local broadcasting stations and cable operators.

An odd possibility the digital tv signal might have some synchronized data that is coming down the internet - hook up digital tv signal to TV from air or from cable and hook up dialup/ dsl/ cable modem to tv - an ABC show or an NFL or ESPN event can be more entertaining and interactive. There can also be interactive games etc that are possible .
willywilson 12/4/2012 | 9:58:01 PM
re: Global Crossing Finally Sold Since when does the value of IP networks hinge on worldwide deployment of VoIP?

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Full-duplex QoS is the key to value, and VoIP is the principal application demanding full-duplex QoS from end to end. Absent mass-market video conferencing, VoIP is the key to making IP networks valuable.

The paradox, of course, is that the seeds of destroying this value are embedded in the IP infrastructure given that QoS might be more cheaply delivered. If the propaganda from the vendors is to be believed, that is.

On the other hand, even if it's more cheaply delivered, the bankruptcy/consolidation of the Silicon Valley shyster-funded IP networks will probably deliver the IP infrasructure into the hands of the same oligopoly that controlled, and overpriced, circuit voice.

Or, as The Who put it:

Meet the new boss
Same as the old boss ...
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