Global Crossing auction date pushed back again

The auction of Global Crossing has been pushed back to tomorrow (6 August) so that those interested in acquiring the...

The auction of Global Crossing has been pushed back to tomorrow (6 August) so that those interested in acquiring the telecommunication company's assets can finalise bids and continue negotiations, according to a Global Crossing spokesman.

"The objective here clearly is to maximise the interests of all concerned parties as part of the Chapter 11 process," the spokesman said. Global Crossing filed for Chapter 11 bankruptcy protection in January.

The auction process involved "very active negotiating," said the spokesman. "This is not an auction that is dead in the water," he said. Rather, those involved are trying to strike a "delicate balance to reach a consensus about what's best". The auction has already been postponed a number of times.

Although the company cannot say who is bidding on the assets, in recent days published reports based on unnamed sources have said that Hutchison Whampoa, a Hong Kong conglomerate, would be one of the bidders. Hutchison and Singapore Technologies Telemedia (STT) had offered creditors $750m (£480m) to buy a majority stake in the company. But the deal fell apart when creditors could not secure more than that for Global Crossing, which listed assets of $12bn (£8bn) and liabilities of $22bn (£14bn) in the bankruptcy filing with the US District Court for the Southern District of New York.

Besides published reports about Hutchison, The Wall Street Journal this week reported that Global Crossing's former chief operating officer and sales director, David Walsh, plans to bid in the auction. He is chairman of Moneyline Telerate, which has backing from One Equity Partners, the private-equity branch of Bank One, which recently bought the assets of Polaroid in an auction.

Global Crossing is one of numerous companies under US federal investigation and has for months received frequent mention by lawmakers pushing for reform.

The company's accounting practices are under investigation by the US Securities and Exchange Commission (SEC) and the US Department of Justice. The US House Committee on Energy and Commerce is also looking into the company's accounting practices and along with the House Subcommittee on Oversight and Investigations has demanded documents and access to employees in a probe aimed at determining whether documents were shredded.

Global Crossing has pledged full cooperation in the investigations and has said an internal review found the shredding allegations were unsubstantiated.

The Committee on Energy and Commerce is also examining how Global Crossing, accounted for deals with other carriers to exchange fibre-optic capacity on each others' networks. Global Crossing has a vast undersea fibre-optic cable network. Under Generally Accepted Accounting Principles (GAAP), it is illegal for carriers to report sales associated with such deals as revenue and to report purchases as capital expenses and not operating costs.

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