Global Crossing's debt ticked up last week after the company received court approval for its plan to emerge from bankruptcy. Traders said the name changed hands as high as 19 early last week and by week's end the company's "B" piece was quoted in the 19-20 range. The name has been moving up from the mid-teens over the last month. Global Crossing plans to emerge from bankruptcy in early 2003. Calls to Dan Cohrs, cfo, were referred to a spokeswoman, who referred questions to court documents and releases.
Under the reorganization plan, bank lenders will receive approximately $300 million in cash from an escrow account furnished with the funds that Global Crossing received from the sale of the company'sIPC Trading Systems units to an investment group led by Goldman Sachs Capital Partners in December 2001. In addition, lenders will receive $175 million of new senior secured notes and 2.4 million shares of new common stock.
In total, the company expects bank loan and letter of credit lenders to recover almost 22.7% of their original $2.26 billion investment. One dealer noted an opportunity for an equity play. Considering both the cash and new securities, the recovery value is about 21%, but the equity could have real value, he explained. The company's estimated enterprise value is $607 million and its equity value is approximately $407 million, according to the spokeswoman.