Global Crossing, the telecoms firm that has filed for bankruptcy protection in the United States, remains committed to its $250 million (€231.4 million) sale to Hutchison Whampoa and Singapore Technologies Telemedia, the firm said yesterday.
Mr Mish Desmidt, Global Crossing Europe's director of corporate communications, said it was sticking with the signed purchase agreement for the company despite a rival bid tabled this week by US telecoms firm IDT.
"We have every intention of pushing forward and getting the deal approved," he said. "It is an absolute priority to get it through regulatory approval."
IDT said it would mount a $255 million all-stock bid to acquire Global Crossing's high-speed network. The company is seeking to edge out the rival cash-and-stock bid by Hong Kong's Hutchison Whampoa, which is controlled by the billionaire Mr Li Ka-shing, and Singapore Technologies Telemedia, which is owned by the government of Singapore.
Hutchison's bid has already cleared antitrust checks in the United States, Canada, Mexico and the European Union, and has been sanctioned by the US bankruptcy court.
But it still requires sanction from the US Federal Communications Commission and the Committee on Foreign Investment in the United States, a panel comprising top national security and economic officials in the US that must sign off on the deal.
IDT cited security concerns expressed by as yet unnamed government officials as a primary reason for tabling the bid.
"We thought this was a done deal. Now we find there are sincere and very strong national security concerns about this international network being potentially controlled by a communist country," said IDT chief executive Mr Jim Courter.
Mr Courter, a former Republican congressman from New Jersey, has long been active in national security issues. From 1991 to 1994, he headed the US presidential commission that oversaw the scaling back of US military bases following the end of the Cold War.
"This network carries all the confidential data of the justice department, the FBI, the CIA, around the world, and it can't be trusted to be in the hands of foreigners," he said.
Mr Courter said that the company's offer would be presented in US federal bankruptcy court in Manhattan, saying that national security concerns favoured the sale of the assets to a US company over the two Asian firms.
"We thought it wise to let the bankruptcy court know that there was another player," he added.
Global Crossing, in a bid to survive one of the biggest bankruptcy proceedings ever last January, struck a deal in August giving control of the once high-flying phone company to two Asian investors for just pennies on the dollar.
Under the deal, they would gain 61.5 per cent control of Global Crossing - whose estimated assets are more than $22 billion - in return for an immediate, $250 million cash infusion.
In addition, when the company completes the bankruptcy reorganisation, the Hutchison group will pay Global Crossing's creditors $300 million in cash and issue them $200 million in new debt.
Hutchison has said it will continue to work closely with the US government to obtain all the necessary approvals for its Global Crossing bid.
- (Additional reporting by Reuters/AFP)
