Bids For Global Crossing Ignite Trading
More than $20 million of Global Crossing's bank debt changed hands last week in the 20-23 range as credit holders weighed the value of new bids for the bankrupt telecom. A $10 million piece traded at 22 1/2 early in the week, but traders said $5 million pieces had been moving all week. Market players debate takeover bids for the name and the value of the company's assets in the case of liquidation. Two weeks ago FleetBoston Financial filed a proposal stating that liquidation was its preference. That's the general sense among lenders, who stand to do better in liquidation than any other creditors.
Hutchinson Whampoa and Singapore Technologies emerged as the first investors interested in the bankrupt company with a $750 million offer for a 79% ownership. Creditors reportedly would receive only $300 million under that plan. Latest reports have both Gores Technology Group and Platinum Equity expected to make a bid for the company that offers creditors substantially more. Three weeks ago the market for the name's bank debt had been priced as low as 18 1/2 to 20 1/2. Dealers said distressed and vulture funds were driving the $40-50 million in trades (LMW, 3/4). Calls to Dan Cohrs, executive v.p. and cfo, were referred to a spokesperson, who did not return calls by press time.