Apr, 2002 : Banks Exit $300M Deal With Global Crossing: Report

📅 April 1, 2002 - An international consortium that operates a global financial transfer system has pulled out of a $300 million networking contract with Global Crossing because of concerns regarding the company's future, according to The Wall Street Journal.
SWIFT, which supplies secure messaging services and interface software to more than 7,000 financial institutions, was becoming uneasy with Global Crossing's financial difficulties, the Journal reported. Global Crossing filed for bankruptcy protection in late January, and the company's accounting practices are currently under investigation by the SEC and FBI.
SWIFT is the highest-profile client to leave Global Crossing since the company filed for bankruptcy protection after being unable to handle its heavy debt load. Analysts say much of the company's debt was incurred from the construction of its global network, which reaches more than 200 major cities in 27 countries.
Sources close to The Wall Street Journal told the publication that the companies would continue to work together on a "non-exclusive" basis. "We will continue to work with them where it makes sense," a source close to SWIFT told the Journal. "But it's not a commitment. It's an intent."
One source close to Global Crossing told the Journal SWIFT's departure is good news for Global Crossing, as the contract was never a profitable one for the company in the first place. What's more, clients like SWIFT that require significant capital-intensive services do not fit in to the company's current business plan, the source added, as Global Crossing is currently attempting to reduce its operational and capital expenses.