NEWS
Bankrupt telco Global Crossing has come up with an escape plan that will see its investors lose over 90 per cent of their money while swelling the coffers of the company to the tune of $700m.
The management for Global Crossing have asked the bankruptcy judge to approve a proposal whereby Hutchison Whampoa and Technologies Telemedia will buy the bulk of the company for $750m.
The remaining 21 per cent will go to existing creditors, along with $300m in cash and $800m in shares.
However, these sums are dwarfed by the $12.4bn Global Crossing owed when it went to the wall last month.
Shareholders will receive nothing.
As a bankrupt company Global Crossing is an attractive target for potential buyers because of its global fibre optic network.
Today's bid by two Asian conglomerates would leave the revived telco with $700m in the bank. The company still has $600m in the bank at present, a situation which made last month's bankruptcy filing all the more controversial.
The news comes at a time of mounting speculation that the telco may be investigated by the FBI for potentially criminal accounting practices.
