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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: mts362 who wrote (2664)	10/14/1999 8:25:00 AM
From: Teddy	Respond to of 15615

pretty good article from today's The Wall Street Urinal: Dow Jones Newswires -- October 13, 1999 DJ TELECOM99: Global Crossing CEO: To Continue European Buys By Richard Inder GENEVA (Dow Jones)--Global Crossing Ltd. (GBLX), the Nasdaq listed international telecommunications carrier, sees no let up in its expansion strategy despite this week's GBP1 billion acquisition of Racal Telecom. Now that the bulk of the cash deal has been worked out, the company is looking to Nordic countries, the Iberian peninsula, and Italy for further acquisitions but could also become the hunted instead of the hunter. It is also looking to expand networks in several major European cities. "We won't have to do much work (on integration of Racal)," Global Crossing Chief Executive Robert Annunziata told Dow Jones Newswires at the Telecom '99 trade show. "There will be no delay in revenues or in acquisitions." In a surprise move Monday, Global Crossing said it had agreed with Racal Electronics PLC (U.RCA) to buy its telecoms subsidiary Racal Telecom beating Energis PLC (ENGSY), which according to The Wall Street Journal Europe, bid about GBP800 million in cash and shares. Annunziata told Dow Jones the acquisition provided a full network in the U.K. and saw very little need to expand it except small branches off the 7300 kilometer network. Apart from a customer base, the acquisition provided a platform of skills for growth in Europe. "We get 1300 people to not only operate an intelligent network within Great Britain, but also around Europe," Annunziata said. Skills such as network management, an understanding of the U.K. and European markets and their legislative framework would speed its expansion, he said. Annunziata said the company was looking at a broad range of opportunities in Europe. He said the company would seek acquisitions that extend its reach in Europe and gives the company wider distribution or more customers. Geographically, the company wants to expand on the Iberian Peninsula, in Italy and into the Nordic regions. It also wants to expand the specific city networks including those in Amsterdam, Paris, Hamburg, Berlin, Frankfurt and New York. All of these could be achieved either through acquisition, or if suitable companies weren't available at the right price, Global Crossing will build networks, Annunziata said. He said there was no clear way of judging the appropriate value of target companies because there are so many variables from the customer mix, to the scope and coverage of the assets and the geographic region. Annunziata said he wasn't concerned about a mooted glut of network capacity. Global Telesystems Group Inc. (GTSG) Colt Telecom PLC (COLT) and France Telecom (FTE) are but a few of the many players expanded their networks in Europe. Global Crossing itself has plans for network expansion and aims to connect 24 cities by the middle of next year. He said the company has demand for capacity, which it can't supply, amounting to about $2 billion. About $1 billion of that excess demand is for sub-sea supply, while the remainder is for U.S. capacity. The company is forecasting a 30% decline in the prices it can charge for wholesale bandwidth to customers such as telecommunications carriers, and about a 15% reduction retail prices. These forecasts were written into its business plan two years ago and even with the current disclosed capacity there was nothing to suggest that the company should change those forecasts. "They are still about right," Annunziata said He also said that for every step reduction in price of broadband capacity there is a greater than three increase in demand. He said the company had a debt-to-market capitalization of about 10% which gave the company plenty of room for financing. Annunziata also said it would issue new shares to finance acquisitions. He said the company was being well served by capital markets referring to the financing of the Racal Telecom unit. Goodman Sates, Global Crossing's adviser, is putting up 90% of the money. Moreover, the GBP900 million debt incurred is staying with Racal's telecoms business. "I am amazed and very pleased at the capability that we do have to raise funds from capital markets," Annunziata said. The company has also been rumored as a takeover target by Deutsche Telekom AG (DT) if it exits the troubled GlobalOne venture. GlobalOne is a venture between Deutsche Telekom, France Telecom (FTE) and Sprint Corp. (FON). Annunziata is non committal, although definitely open to the prospect. "Any company that wants to be in this world wide market place knows they need to have global reach. If somebody one day decides to come and phone us, well, I have to do what is right for my shareholders," he said.