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To: Rocket Red who wrote (106815)	6/23/2002 11:42:50 PM
From: Rocket Red	Respond to of 150070

Global Crossing Readies New Consortium Jun 23 4:40pm ET By Siobhan Kennedy NEW YORK (Reuters) - Global Crossing's management team is gearing up this week to assemble a new consortium of investors that can allow the bankrupt telecom firm to operate as an independent company, Chief Executive John Legere said. In an interview, the official of the troubled international communications network operator said that Global Crossing is looking to raise up to $500 million from outside investors to bring its go-it-alone bankruptcy reorganization plan to life. This financing plan must be pulled together hastily in order to meet a July 11 court-mandated deadline for takeover bids from rival telecoms groups seeking to wrest control of Global Crossing and its far-flung communications network. "We would like to bring in $250 million to $500 million worth of equity, of cash, to make sure we have a very comfortable cushion to grow the business," Legere told Reuters in an interview on Friday. But attracting new financial backers could be complicated by allegations revealed in court documents on Friday of possible document destruction by Global Crossing employees earlier this year, around the time it filed for bankruptcy protection. The company denied any such incidents took place. Legere did not provide details of who the consortium partners were but the CEO said he had just finished a fund-raising tour -- taking in the United States, Latin America and Europe -- where he had conducted meetings with several telecommunications companies and venture capital funds. He said a string of those companies were now conducting due diligence on Global Crossing with a view to becoming part of a consortium that will lead the telecom firm out of bankruptcy. "The company could get sponsored by one big player, but it's logical that there's room for various people to invest in smaller chunks and that's what we're investigating," he said. "By next week, we start introducing them to each other." Global Crossing filed for the fourth largest U.S bankruptcy in January, buckling under $12.4 billion in debt, a glut of high-speed network capacity and falling prices for the spare capacity it sells to other telecommunications operators. COST-CUTS BUY TIME Since then, the company -- which is also the subject of two federal probes over its accounting -- has taken drastic measures to cut costs. It has closed 220 facilities and cut 70 percent of its work force to a current 4,800 from 17,000 in 2001, Legere said. Operating expenses, which had been running at $170 million a month, were slashed to $71 million by May, and Legere said the company planned to reduce expenses by an additional $10 million a month for the rest of the year. "You can look at our results and realize that -- with what we've done with cash and what we could possibly do with the sale of our non-core assets -- mathematically, we could take this thing out (of bankruptcy) without any money," Legere said. He was referring to the three divisions of Global Crossing which are not related to its high-speed fiber optic network and which it has said could be sold off as part of a restructuring plan. "But you don't want to just get out, you want to get out with the ability to grow. That's why we're looking at various forms of how much equity we could bring in," he said of the company's ambitions once it can emerge from bankruptcy. Global Crossing first disclosed its intention to develop its own reorganization plan last month, after it failed to reach an agreement with two Asian companies over a take over bid. Hutchison Whampoa Ltd. <0013.HK> of Hong Kong and state-owned Singapore Technologies Telemedia Pte. had offered to pay $750 million for 79 percent of Global Crossing, but the company's creditors balked at the offer, saying the price was too low for a company with an estimated $22.4 billion in assets. Legere said it was likely that the Asian suitors will submit a bid for Global Crossing by the July 11 deadline. In addition, he said he knew of other telecom groups planning to make an offer for the company's high-speed network. He also said there could be bids from various financial players. "All I know is right now we're feeling comfortable that we've got enough interest that it will be a competitive process," he said. Telecom players Verizon Communications Inc. and Level 3 Communications Inc. of the United States, Deutsche Telekom of Germany and U.S. investment buy-out firm Gores Technology, each have been reported as interested in Global Crossing assets, but no formal bids have been made so far. If multiple bids were to emerge, an auction would be held on July 24.