COMPANIES & FINANCE: INTERNATIONAL: Global plans fund-raising
98% match; Financial Times ; 19-Feb-2000 12:00:00 am ; 289 words
Global Crossing, the US telecommunications group, said it was considering a range of options for raising money to help accelerate its capital spending plans. These include separate listings for its Asian operations and its web-hosting business, as well as a convertible bond offering for its US local exchange operations.
The comments came as the Bermuda-based company reported a jump in losses in the final three months of last year, reflecting heavier spending on new network capacity and a larger salesforce. The company's shares slumped on the news.
Costs would continue to rise ahead of revenues, said Bob Annunziata, chief executive, as the company pursued one of its main objectives: "Never run out of bandwidth."
Global Crossing also signalled slower reported revenue growth ahead as a result of a new accounting treatment for deferred revenues - though it added this would have no impact on cash flow or Ebitda (earnings before interest, taxes, depreciation and amortisation.)
The changed accounting reflected changed business practice, Mr Annunziata said. The company adopted new terms for how it leases capacity on its network, a move that was intended to generate more business, he added.
However, the accounting switch will force Global Crossing to defer the recognition of revenue from selling typical 25-year leases on its network. Had the change been in effect before, it would have cut fourth-quarter revenues by Dollars 200m, or 18 per cent, the company said.
The news wiped 8.6 per cent from Global Crossing's share price early yesterday, down Dollars 5 1/4 at Dollars 55.
The company's pro-forma operating loss - adjusted to reflect a spate of acquisitions last year - climbed to Dollars 184m, from Dollars 54m in the same quarter the year before, while revenues rose 6 per cent to Dollars 1.1bn. The higher spending produced a marginal fall in Ebitda, down 5 per cent to Dollars 344m.
"Late in the quarter we were expanding capacity significantly, but we haven't had time to add revenues for those assets yet," said Dan Cohrs, chief financial officer.
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