Jan, 2002 : Global Crossing Files for Bankruptcy Protection

📅 January 28, 2002 - Telecommunications firm Global Crossing Ltd. said Monday it had filed for Chapter 11 bankruptcy protection in order to re-organize its finances.
The filing, a result of the company's heavy debt load, applies only to certain affiliates of the company.
The company also said it has signed a letter of intent with Hutchison Whampoa Limited and Singapore Technologies Telemedia Ltd. for a $750 million cash investment and a joint majority stake in the company's equity.
Analysts say the Bermuda-based firm couldn't handle the debt load that emerged from the construction of its global network, which reaches more than 200 major cities in 27 countries. The filing is expected to leave common shareholders with nothing.
Pan-Asian telecommunications firm Asia Global Crossing said it was not one of the affiliates that had commenced Chapter 11 proceedings. However, the company did announce that it had been formally notified by the New York Stock Exchange that it was not in compliance with minimum listing standards, and had six months to comply with the minimum requirements. Global Crossing owns a majority stake in the company.
John Legere, Chief Executive Officer of Global Crossing, said in a statement that the restructuring would help the company overcome its financial issues. "Even with the financial uncertainty we've recently experienced, customers have continued to choose our network over many others," he said. "With this restructuring, we'll put financial uncertainty behind us and the power of our network will once again become the primary factor in the minds of our customers."
Global Crossing said operations would continue without interruption, and that employees would continue to be paid.