GREAT, BULLISH ARTICLE!
Global Crossing Ltd.
The Wall Street Journal -- March 12, 1999
Technology:
Global Crossing Plans Fiber-Optic Loop
Linking South America With the U.S.
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By Rhonda L. Rundle
Staff Reporter of The Wall Street Journal
Global Crossing Ltd., which launched its first telecommunications services only last year, unveiled plans to build a $1 billion fiber-optic loop linking major cities of South America with the U.S. and other parts of the world.
Analysts said the project wasn't a complete surprise, but the official announcement reinforced spreading perceptions among investors that the young company is building the facilities and management capable of lifting it to the ranks of major players in the burgeoning market for voice, text and video transmissions.
The announcement of the South American network came on a day when the stock market hit new highs. Global Crossing shares rose $5.75, or 15%, to $44.375 in Nasdaq Stock Market trading. The company raised about $400 million last August in an initial public offering at $19 a share. The shares of the company, based in Los Angeles and Hamilton, Bermuda, split 2-for-1 earlier this week.
The new loop "is a perfect fit with our strategy of being the premier supplier with facility-based ownership so we can meet the demands of the marketplace," said Robert Annunziata, Global Crossing's new chief executive officer, who was lured away last month from a top post at AT&T Corp. The first phase of the South America project is set to enter service late next year, he said.
Mr. Annunziata said he "welcomes" the risks facing the company, which already has several other big projects under way around the world. "I've done this before," he said, referring to founding of Teleport Communications Group, a local phone company aimed at corporate customers that AT&T purchased last year. Global Crossing service so far is limited to London, Amsterdam and New York, and a few other U.S. cities.
Global Crossing didn't elaborate on its financing plans for the South American project, except to say that it has ample reserves of cash and borrowing opportunities with banks and vendors. "The company has over $1 billion in cash; we don't contemplate going to the capital markets," said Gary Winnick, co-chairman and founder.
Construction on the South America network began last December with extensive marine surveys to plot the exact course for the cables. The company has lawyers working on "landing licenses" in every country in South America and "we don't see that as an obstacle at this point," said Patrick Joggerst, vice president of sales and marketing.
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