Global Crossing files for bankruptcy

International data communication carrier Global Crossing Holdings Ltd. plans to file for bankruptcy protection both in New York and its Bermuda home base, stranding investors in yet another giant corporate bankruptcy of the new year.

Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd. will invest a total of US$750 million in Global Crossing, and will assume ownership of the company, if the U.S. Bankruptcy Court for the Southern District of New York and the Supreme Court of Bermuda agree to the restructuring terms, Global Crossing said in a statement Monday.

Existing common equity and preferred shareholders will lose their entire investment in the company if the ownership deal goes through.

Global Crossing laid 1.7 million miles of fiber-optic cable to build an Internet protocol-based network connecting 27 countries and 200 major cities, largely with bonds and capital investment from a 1998 initial public offering. With a market capitalization of more than $40 billion and a share price of about $50 in 1999, the company's billions of dollars of debt looked manageable.

Global Crossing finished its international network with the connection of Lima, Peru, to the company's South American cross-connection in June. The telecommunication market had reached freefall by then, however, and it had become increasingly clear to investors that much of Global Crossing's communication capacity would go unused for some time.

Global Crossing claimed $22.4 billion in liabilities and $12.4 billion in assets in its bankruptcy filing.

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