By Heather McLean, 28 January 2002 16:00
NEWS Troubled wholesale telecoms company Global Crossing may file for Chapter 11 bankruptcy protection as early as next week. Giga telecoms analyst Bernt Ostergaard said the organisation has already stashed half of its $400m cash in its stand-alone sister company, Asia Global Crossing (AGC), to keep the creditors at bay. Ostergaard told silicon.com: "There were indications the management of Global Crossing were moving money into AGC in the first week of January this year, a typical move of companies preparing to file for bankruptcy protection. "Of the $400m draft they could draw on, Global Crossing took $200m and put it into AGC," he added. "The cash is out of Global Crossing's hands and out of the reach of its creditors." A spokeswoman for Global Crossing said company refused to comment on speculation. The company posted a third quarter loss of $3.4bn in November 2001. Global Crossing got a waiver from its lenders on 28 December for violations of a credit agreement concerning $2.25bn in loans, valid till 13 February 2002. Prior to that, Standard and Poor's downgraded the company on 11 December after raising concerns about its liquidity and said it was unlikely to be able to drum up more funding.
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