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GLOBAL–Joint Venture of Giant Firms Eyes an IPO

Asia Global Crossing Ltd. a joint venture of Global Crossing Ltd., Microsoft Corp. and Softbank Corp. that is building an Asian undersea cable network filed with the Securities and Exchange Commission for an initial public stock offering.

The company didn’t say in its filing how many shares of Class A common stock it plans to sell or what the share price will be. The company used a $100 million figure to calculate the SEC filing fee. Proceeds from the stock sale will go toward building the company’s network, repaying debt, and investing in related telecommunications and Internet companies.

Asia Global was created last November and is 93 percent owned by Global Crossing, headquartered in Bermuda with executive offices in Beverly Hills. Microsoft and Softbank together invested $350 million for a 7 percent stake. The company is building an 11,000-mile cable network linking Japan, Hong Kong, China, South Korea, Malaysia and the Philippines.

Microsoft and Softbank have agreed to buy at least $200 million in cable capacity once the network is completed.

Asia Global is headed by 41-year-old Chief Executive John J. Legere, a former Dell Computer Corp. executive.

The company’s network is to be part of Global Crossing’s worldwide system connecting 27 countries and 200 major cities. The network will offer Internet services, telecommunications services and Web-hosting capabilities.

The Asia unit also owns 89 percent of GlobalCenter Japan, a Web hosting service joint venture set up in January with Internet Research Institute, according to the filing. GlobalCenter launched operations in Tokyo in April and plans to have three Web hosting centers operating by the end of 2001, with possible expansion to Osaka.

For the three months ended March 31, Asia Global had net income of $14.3 million on revenue of $75.8 million. The company had net income of $1.3 million for the same period in 1999.

Asia Global didn’t say what its stock ticker would be or what exchange it would trade on.

The sale will be underwritten by Goldman, Sachs & Co., Salomon Smith Barney and Merrill Lynch & Co.

The proposed sale comes as Global Crossing sued Tyco International Ltd., the world’s largest maker of undersea fiber-optic cable, accusing Tyco of stealing trade secrets.

Global Crossing, which hired Tyco Submarine Systems Ltd. in 1998 to build a fiber-optic network circling South America, alleges that Tyco shared information with Global Crossing’s rival, Telefonica SA, which is developing its own system.

Among the trade secrets Tyco is accused of stealing was a plan to lay a terrestrial cable across the Andes Mountains, rather than continue the undersea loop around Cape Horn, the suit says.

Tyco announced in January plans to build its own global telecommunications network, which would compete directly against Global Crossing, the suit states.

The unit, which will be known as TyCom Ltd., filed to go public in March in a stock sale worth as much as $1.3 billion. The company recently raised its expected share price to between $26 and $30 a share from $20 to $25 a share in an earlier filing.

An initial sale is expected as early as next month.

Shares of Tyco International Ltd. fell more than 4 percent the day the suit was filed, while Global Crossing shares fell more than 15 percent.

Bloomberg News

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