Global Crossing

Last updated
Global Crossing Limited
Industry Telecommunications
FoundedMarch 1997;27 years ago (1997-03)
DefunctOctober 3, 2011;12 years ago (2011-10-03)
FateAcquired by Level 3 Communications which was acquired by CenturyLink (now Lumen Technologies)
Headquarters Hamilton, Bermuda
Key people
 John Legere, CEO
RevenueUS$2.536 billion (2009)
-US$141 million (2009)
Number of employees
5,235 (2009)
Footnotes /references
[1]

Global Crossing Limited, was a telecommunications company that provided computer networking services and operated a tier 1 carrier. It maintained a large backbone network and offered peering, virtual private networks, leased lines, audio and video conferencing, long-distance telephone, managed services, dialup, colocation centres and VoIP. Its customer base ranged from individuals to large enterprises and other carriers, with emphasis on higher-margin layered services such as managed services and VoIP with leased lines. Its core network delivered services to more than 700 cities in more than 70 countries. [2]

Contents

Global Crossing was the first global communications provider with IPv6 natively deployed in both its private and public networks. [3] It was legally domiciled in Bermuda and had its administrative headquarters in New Jersey.[ citation needed ]

In 1999, during the dot-com bubble, the company was valued at $47 billion, but it never had a profitable year. [4] [5] In 2002, the company filed for one of the largest bankruptcies in history and its executives were accused of covering up an accounting scandal. [6] On October 3, 2011, Global Crossing was acquired by Level 3 Communications for $3 billion, including the assumption of $1.1 billion in debt. [7]

History

Founding and early growth

In March 1997, Global Crossing was founded by Gary Winnick, the former manager of the bond desk of Drexel Burnham Lambert, and his Drexel colleagues who moved on to work at Canadian Imperial Bank of Commerce (CIBC): Abbott L. Brown, David L. Lee, and Barry Porter. In 1997, the company raised $35 million, including investments by Winnick and the CIBC Argosy Merchant Funds (later Trimaran Capital Partners).[ citation needed ] Winnick was chairman of the company from 1997 until 2002. In 1998, he hired Lodwrick Cook, former CEO of Atlantic Richfield Company, as co-chairman. [8] John Scanlon became the first CEO of the company in the same year, but was replaced in March 1999 by Robert Annunziata, who had resigned as president of AT&T Corporation's Business Services group to "build a company from start to finish". [9] [10]

In May 1999, Global Crossing made an offer to acquire US West, [11] but was outbid by Qwest. [12] In July 1999, the company acquired Global Marine Systems, the undersea cable maintenance arm of Cable & Wireless, for $885 million. [10] Later that year, in September 1999, the company acquired Frontier Communications, the former Rochester Telephone Corporation, for $9.9 billion and renamed it Global Crossing North America. [13] That same month, Global Crossing acquired 49% of SB Submarine Systems, [10] and formed Asia Global Crossing, a $1.3 billion joint venture with SoftBank Group and Microsoft to build a fiber-optic network in Asia linking Japan, China, Singapore, Hong Kong, Taiwan, South Korea, Malaysia and the Philippines. [14] [10] In November 1999, Global Crossing acquired Racal Telecom for $1.65 billion. [15]

In January 2000, the company formed a 50/50 joint venture with Hutchison Whampoa, valued at $1.2 billion, for a fiber-optic network in Hong Kong. [16] In March 2000, Annunziata resigned, receiving $160 million during his 13-month tenure. [17] Leo Hindery, who had joined the company a few months earlier as head of its web hosting division, GlobalCenter, then became CEO.[ citation needed ] In September 2000, the company announced a deal to sell GlobalCenter to Exodus Communications for $6.5 billion in stock. By the time the deal closed in January 2001, the stock was only worth $1.95 billion. [18] Hindery then resigned as CEO and was replaced with Thomas Casey, a lawyer who came to Global Crossing from Merrill Lynch, where he was co-head of the global telecom investment banking group. [19] For the year 2000, the company lost $1.4 billion. [4]

In 2001, the company sold its local telephone operations and the Frontier name in 2001 to Frontier Communications for $3.65 billion in cash. [20] In the summer of 2001, the company began discussing a transaction with Enron in which the company would pay Enron $650 million for its fiber-optic network in exchange for Enron paying the company $650 million to use the network, a move that would boost both companies' revenues without costing them anything. The transaction did not materialize. [4] In October 2001, Casey was replaced by John Legere, the CEO of Global Crossing subsidiary Asia Global Crossing. [21]

Bankruptcy and reemergence

In the fourth quarter of 2001, the company lost $3.4 billion on revenue of $793 million. In January 2002, the company filed bankruptcy. It listed total assets of $22.4 billion and debts of $12.4 billion and was paying annual interest of $600 million. [5] [22] As part of the bankruptcy, Hutchison Whampoa and ST Telemedia agreed to invest $750 million in the company. [23] Hutchinson Whampoa later pulled out of the deal due to regulatory resistance. [24]

CIBC realized an estimated gain of $2 billion from its relatively small equity investment in the company, making it one of the most profitable investments by a financial institution in the 1990s. [25] [26] Winnick salvaged $735 million from his $20 million investment, although his interest was worth $6 billion on paper at its peak. [4]

In April 2002, Hutchinson Whampoa bought the company's 50% interest in the Hong Kong joint venture for $120 million. [27]

In November 2002, Global Crossing's Asian subsidiary, Asia Global Crossing, filed bankruptcy and sold its assets to Asia Netcom, a subsidiary of China Netcom. [28]

Between 1998 and 2001, Winnick sold approximately $420 million in company stock and other executives sold an additional $900 million in company stock. [29]

On December 9, 2003, the company emerged from bankruptcy and on April 1, 2004, the company once again became a public company. [30]

In March 2004, Gary Winnick and other ex-executives settled lawsuits filed by investors and former employees accusing the executives of committing securities fraud by using improper accounting to inflate the company's revenue. [6]

In October 2006, the company announced the acquisition of UK-based Fibernet Corp. for £49.8 million. [31]

In May 2007, the company acquired Impsat, [3] a leading Argentine telecommunications company. Global Crossing and Impsat have had a commercial relationship since 2000, when Global Crossing selected Impsat as one of its providers of Point of Presence (PoP) facilities for Global Crossing's Latin American network, known as South American Crossing. Impsat has also been a customer of Global Crossing in Latin America since 2000.[ citation needed ]

In October 2011, Level 3 Communications acquired the company for $3 billion, including the assumption of $1.1 billion in debt. [7]

Controversies

Political activity

The company contributed $250,000 to each of the 2000 Republican National Convention and the 2000 Democratic National Convention and made major contributions to politicians of both parties. The company also courted politicians to invest in the company. The company hired lobbyist and former United States Assistant Attorney General Anne Bingaman, married to Democratic New Mexico Senator Jeff Bingaman, paying her $2.5 million between January and June 1999 to try to block licensing of an AT&T, MCI, and Sprint consortium to lay cable from the U.S. to Japan. [32] [33]

Executive bonuses

Despite the massive layoffs, unpaid employees, and cancelled pensions as a result of the bankruptcy, executives received huge bonuses and loan relief. [34]

Russian submarine rescue

In August 2000, the company was involved in an attempted rescue of a Russian submarine during the Kursk submarine disaster. [35] Global Crossing's undersea cable division contracted with British Defense Ministry to operate the LR5 rescue submersible. As part of the agreement, Global Crossing was to keep it on call for emergencies.[ citation needed ]

Related Research Articles

<span class="mw-page-title-main">Telefónica</span> Spanish multinational telecommunications company

Telefónica, S.A. is a Spanish multinational telecommunications company with registered office and headquarters located in two different places, both in Madrid, Spain. It is one of the largest telephone operators and mobile network providers in the world. It provides fixed and mobile telephony, broadband, and subscription television, operating in Europe and the Americas.

<span class="mw-page-title-main">Orange S.A.</span> French multinational telecommunications corporation

Orange S.A., formerly known as France Télécom S.A. is a French multinational telecommunications company. It has 266 million customers worldwide and employs about 89,000 people or more in France and 59,000 people worldwide. In 2023, the group had a revenue of approximately €43 billion. The company's head office is located in Issy-les-Moulineaux, in the southwestern suburban area of Paris City.

<span class="mw-page-title-main">Li Ka-shing</span> Hong Kong entrepreneur

Sir Li Ka-shing is a Hong Kong billionaire business magnate, investor, and philanthropist. He is the senior advisor for CK Hutchison Holdings and CK Asset Holdings, after he retired from the Chairman of the Board in May 2018; through it, he is a port investor, developer, and operator of the largest health and beauty retailer in Asia and Europe. As of July 2023, Li is the 33rd richest person in the world, with an estimated net wealth of US$37.7 billion.

Hutchison Whampoa Limited (HWL) was an investment holding company based in Hong Kong. It was a Fortune Global 500 company and one of the largest companies listed on the Hong Kong Stock Exchange. HWL was an international corporation with a diverse array of holdings which included the world's biggest port, and telecommunication operations in 14 countries that were run under the 3 brand. Its businesses also included retail, property development, and infrastructure.

<span class="mw-page-title-main">Vodafone</span> British multinational telecommunications company

Vodafone Group Plc is a British multinational telecommunications company. Its registered office and global headquarters are in Newbury, Berkshire, England. It predominantly operates services in Asia, Africa, Europe, and Oceania.

O2 (typeset as O2) is a global brand name owned by the Spanish telecommunications company Telefónica. The company uses the O2 brand for its subsidiaries in the United Kingdom and Germany. Since 2018, it is also used as an online-only flanker brand in Spain.

<span class="mw-page-title-main">Orange (India)</span>

The Orange brand in India, through a complicated set of mergers and divisions, was acquired and eventually retained by Orange S.A.; and currently operates as Orange Business Services India.

Innovate Corp. is an American public financial services company founded in 1994.

Orange Business, the business services arm of Orange S.A., is a global integrator of communications, products, and services for multinational corporations.

<span class="mw-page-title-main">Frontier Communications</span> American telecommunications company

Frontier Communications Parent, Inc. is an American telecommunications company. Known as Citizens Utilities Company until 2000, Citizens Communications Company until 2008, and Frontier Communications Corporation until 2020, as a communications provider with a fiber-optic network and cloud-based services, Frontier offers broadband internet, digital television, and computer technical support to residential and business customers in 25 states. In some areas it also offers home phone services.

Hutchison Asia Telecom Group or HAT, is a division of Hong Kong-based multinational conglomerate CK Hutchison Holdings. The division provides telecommunications services to several Asian countries. The division was formerly incorporated as Hutchison Telecommunications International Limited, known as Hutchison Telecom or HTIL in short. It was an offshore company in the Cayman Islands and a listed company in the Stock Exchange of Hong Kong. It operates GSM, 3G and 4G mobile telecommunications services in Indonesia, Sri Lanka and Vietnam under brands 3, Hutch and Vietnamobile.

The Telecoms crash, also known as the Telecommunications Bubble was a stock market crash that occurred in 2001, after the bursting of the dot-com bubble.

<span class="mw-page-title-main">Gary Winnick</span> American financier (1947–2023)

Gary Winnick was an American billionaire businessman, industrialist, and investment banker. He was the chairman and CEO of Winnick & Company, a private equity firm that he originally established as Pacific Capital Group in 1985. He founded WCO Spectrum in 2020, which invests in wireless spectrum licenses in the United States.

<span class="mw-page-title-main">3 (company)</span> Global telecommunications brand

Hutchison 3G Enterprises S.A.R.L., trading as 3 (Three) and Hutchison 3G, is the owner of several originally UMTS-based mobile phone networks and broadband Internet providers, which operate in Hong Kong, Macau, Austria, Denmark, Indonesia, Ireland, Italy, Sweden, and the United Kingdom.

<span class="mw-page-title-main">Pacnet</span> Global telecommunications provider

Pacnet was a global telecommunications service provider between 2008 and 2015. It was formed from the operational merger of Asia Netcom and Pacific Internet on 8 January 2008. It was owned by a private investor group comprising Ashmore Investment Management Limited, Spinnaker Capital Limited and Clearwater Capital Partners. Its acquisition by the Australian telecommunications company Telstra was announced at the end of 2014, and completed in April 2015.

Hutchison Port Holdings Limited, trading as Hutchison Ports, is a private holding company incorporated in the British Virgin Islands. The port operator group is a subsidiary of CK Hutchison Holdings. Some operation of the company were listed as Hutchison Port Holdings Trust in Singapore Exchange.

Vodafone India was the Indian subsidiary of UK-based Vodafone Group and was a provider of telecommunications services in India with its operational head office in Mumbai.

<span class="mw-page-title-main">GTT Communications</span> Tier 1 Internet service provider

GTT Communications, Inc. (GTT), formerly Global Telecom and Technology, is a multinational telecommunications company and managed network and security service provider headquartered in Arlington, Virginia. GTT operates a Tier 1 IP network and provides Internet; wide area networking, SD-WAN; network security, managed services; and voice and video transport services.

<span class="mw-page-title-main">HGC Global Communications</span> Internet service provider in Hong Kong

HGC Global Communications Limited, formerly known as Hutchison Global Communications Limited, is an internet service provider of Hong Kong. In the past it was part of Hutchison Telecommunications, itself part of a mega-conglomerate CK Hutchison Holdings. Hutchison Global Communications was a listed company, via its parent company Hutchison Global Communications Holdings from 2004 to 2005.

References

  1. ↑ "Global Crossing Limited Offer To Exchange Up To $750,000,000 12% Senior Secured Notes due 2015 which have been registered under the Securities Act of 1933 for any and all outstanding 12% Senior Secured Notes due 2015". U.S. Securities and Exchange Commission. Archived from the original on 2018-05-05. Retrieved 2018-05-05.
  2. ↑ "Level 3 to Acquire Global Crossing" (Press release). Business Wire. April 11, 2011. Archived from the original on May 6, 2018. Retrieved May 5, 2018.
  3. 1 2 "Global Crossing Completes Acquisition of Impsat" (Press release). Thomas Register. May 22, 2007. Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  4. 1 2 3 4 O'BRIEN, TIMOTHY L. (August 15, 2004). "A New Legal Chapter for a 90's Flameout". The New York Times . Archived from the original on 2015-05-28.
  5. 1 2 Stern, Christopher (January 29, 2002). "Global Crossing Files for Bankruptcy". The Washington Post . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  6. 1 2 Pham, Alex; Colker, David (March 20, 2004). "Global Crossing Ex-Execs to Pay $324 Million" . Los Angeles Times .
  7. 1 2 "Level 3 Completes Acquisition of Global Crossing" (Press release). PR Newswire. October 4, 2011. Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  8. ↑ "The Rise And Fall Of Global Dreams" . The New York Times . March 3, 2002. Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  9. ↑ HOLSON, LAURA M. (October 12, 2000). "Fast Times at Global Crossing; Enjoying the Spotlight While Building An Upstart in Telecommunications" . The New York Times . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  10. 1 2 3 4 Bulkley, Kate (November 17, 1999). "Corporate profile: Global Crossing - His company is two years old. But it's already worth pounds 20bn". The Independent . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  11. ↑ "US West, Global Crossing tie". CNN . May 17, 1999. Archived from the original on June 30, 2019. Retrieved June 30, 2019.
  12. ↑ Blumenstein, Rebecca (July 19, 1999). "Qwest Wins U S West for $35 Billion, Ending Duel With Global Crossing" . The Wall Street Journal . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  13. ↑ "Global Crossing completes merger with Frontier". Marketwatch . September 28, 1999. Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  14. ↑ SCHIESEL, SETH (September 8, 1999). "Microsoft to Join Fiber Optic Venture in Asia" . The New York Times . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  15. ↑ "Global Crossing Completes Acquisition of Racal Telecom" (Press release). Business Wire. November 24, 1999. Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  16. ↑ "Hutchison Whampoa and Global Crossing Complete Telecom Joint Venture in Hong Kong" (Press release). Hutchison Whampoa. January 10, 2000. Archived from the original on January 10, 2018. Retrieved May 5, 2018.
  17. ↑ Douglass, Elizabeth (March 18, 2000). "Global Crossing's Annunziata Gets $160 Million for 13 Months on Job" . Los Angeles Times . Archived from the original on June 30, 2019. Retrieved June 30, 2019.
  18. ↑ Douglass, Elizabeth (October 14, 2001). "Global's Lost Connection" . Los Angeles Times . Archived from the original on June 30, 2019. Retrieved June 30, 2019.
  19. ↑ "Global Crossing CEO out". CNN . October 11, 2000. Archived from the original on June 30, 2019. Retrieved June 30, 2019.
  20. ↑ Bartash, Jeffry (July 12, 2000). "Global Crossing sells local business". Marketwatch . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  21. ↑ McLean, Heather (October 5, 2001). "Global Crossing gets fourth CEO in two years". ZDNet .
  22. ↑ Bartash, Jeffry (January 29, 2002). "Anatomy of Global Crossing's failure". Marketwatch . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  23. ↑ "Global files for bankruptcy". CNN . January 28, 2002. Archived from the original on June 30, 2019. Retrieved June 30, 2019.
  24. ↑ KOLESNIKOV, SONIA (April 30, 2003). "ST Telemedia to buy Global Crossing stake". United Press International . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  25. ↑ FABRIKANT, GERALDINE; ROMERO, SIMON (February 11, 2002). "How Executives Prospered as Global Crossing Collapsed" . The New York Times . Archived from the original on March 22, 2017. Retrieved February 19, 2017.
  26. ↑ "The Drexel Connection at Global Crossing" . Bloomberg News . March 11, 2002. Archived from the original on 2018-05-06. Retrieved 2018-05-05.
  27. ↑ "Hutchison acquires Asia Global Crossing's interest in Hong Kong joint ventures for US$120 Million" (Press release). Hutchinson Whampoa. April 29, 2002. Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  28. ↑ Granelli, James S.; DOUGLASS, ELIZABETH (November 18, 2002). "Asia Global Crossing Files for Bankruptcy" . Los Angeles Times . Archived from the original on June 30, 2019. Retrieved June 30, 2019.
  29. ↑ Hopkins, Jim; Krantz, Matt (February 26, 2002). "Global's warning signs there, Wall St. was unaware". USA Today . Archived from the original on 2018-11-05. Retrieved 2018-05-05.
  30. ↑ "Global Crossing Stock to Begin Trading on NASDAQ National Market Today" (Press release). ST Telemedia. April 1, 2004. Archived from the original on June 30, 2019. Retrieved June 30, 2019.
  31. ↑ Lomas, Natasha (October 11, 2006). "Global Crossing snaps up Fibernet". ZDNet .
  32. ↑ Ackman, Dan (March 13, 2002). "House Committees To Investigate Global Crossing". Forbes . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  33. ↑ Hamburger, Tom; Harwood, John (March 4, 2002). "Global Crossing Got Little in Return For Its Big Political Contributions" . The Wall Street Journal . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  34. ↑ Blumenstein, Rebecca; Solomon, Deborah; Chen, Kathy (February 21, 2002). "Global Crossing Cosseted Executives As Pink Slips Loomed, Stock Fell" . The Wall Street Journal . Archived from the original on May 5, 2018. Retrieved May 5, 2018.
  35. ↑ Douglass, Elizabeth (August 19, 2000). "Rescue Mission Steers Craft Operator Into Uncharted Waters" . Los Angeles Times . Archived from the original on June 30, 2019. Retrieved June 30, 2019.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.