Market players were disappointed by the low reported bid from Hutchison Whampoa and Singapore Technologies Telemedia and a competing offer from BANK ONE's private equity group for Global Crossing this week. "On Global, it's a lot of pain to take," said one dealer. The bank debt is unchanged in the 15-17 context, and traders noted that there have not been any trades since the news came out.
According to reports, the Asian investors currently are offering an investment of up to $300 million for 62% of Global Crossing's reorganized equity. Compared to the company's roughly $12 billion in debt, the picture looks grim for creditors. The bank lenders would receive the majority of the cash, $175 million in notes and 6% of the new equity.
In January, Hutchison Whampoa and Singapore Technologies Telemedia signed a letter of intent with the company, indicating that they would inject $750 million in cash into the company in exchange for a joint majority stake in the reorganized company. The potential investors later pulled their offer. A spokeswoman for Global Crossing said the company is not commenting on the bidding process, but she noted that the auction will be delayed until Wednesday.