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Asia Netcom to Buy Asia Global Crossing
Nov 2002
HONG KONG, Nov. 22 -- Asia Global Crossing Ltd. announced this week that it has signed a definitive agreement to sell substantially all of its operations and assets to Asia Netcom, a new company organized by China Netcom (Hong Kong) and expected to include Newbridge Capital and Softbank Asia Infrastructure Fund as co-investors. As part of the agreement and to facilitate the restructuring process, certain Asia Global Crossing entities filed Monday for Chapter 11 protection in the US Bankruptcy Court for the Southern District of New York and coordinated proceedings in the Supreme Court of Bermuda.

Asia Global Crossing said in a news release that operations will continue uninterrupted during the reorganization and that customers will not experience any change in service. Asia Global Crossing’s management team and employee base will remain in place, it said.

Under the terms of the agreement, Asia Netcom will acquire substantially all of Asia Global Crossing’s operating subsidiaries, excluding Pacific Crossing Ltd. and related entities.

Asia Global Crossing’s principal vendors have agreed to restructure the obligations owed to them. The new company will assume these obligations as well as customer contracts and operating liabilities of the acquired entities. It is expected that, upon completion of the transaction, approximately $80 million of residual cash will be retained by Asia Global Crossing to pay its other creditors and to settle certain expenses in the Chapter 11 case and the Bermuda proceeding. No recovery is expected for Asia Global Crossing shareholders.

Asia Netcom will be funded by $120 million of new equity from the consortium members and additional bank financing, for the future operations of the company.

The parties expect the Asia Netcom transaction to close during the first quarter of 2003.

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