XO Communications and its Chairman Carl Icahn are proposing a tender offer for any and all of Global Crossing's bank debt for 21 cents on the dollar. Global Crossing has approximately $2.25 billion of senior secured bank debt, which has already been trading in the 21-22 context. One trader believed that lenders would not take Icahn up on his offer, calling it too low. Calls to Icahn were not returned by press time.
XO and Icahn are also prepared to offer $700 million in cash to acquire all the outstanding assets of Global Crossing as a stalking-horse bidder. At the end of the day it is an all-cash offer and it is a U.S. buyer, said one trader, referring to positive aspects of XO's offer as well as the delays Global Crossing has received trying to get regulatory approval from the Committee of Foreign Investment in the U.S. for its foreign acquirer Singapore Technologies Telemedia.
A hearing to discuss the extension of the company's exclusive right to file a reorganization plan and to enter an amended purchase agreement, which will take into account that ST Telemedia is now the sole investor in Global Crossing under the agreement after Hutchison Telecommunications Limited bowed out, was postponed from last Monday until today, said a company spokeswoman. Without a new purchase agreement in place there would appear to be no penalty if ST Telemedia or Global Crossing chooses to step out of their current agreement.