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Global Crossing Announces Sale of Global Marine
Systems to Bridgehouse Marine
Company
values transaction at up to $132 million.
Global Crossing intends to transfer stake in S.
B. Submarine Systems to Global Marine as part of
sale.
New owner enables Global Marine to continue diversification
into new markets, while Global Crossing sharpens
focus on IP services.
MONDAY, AUGUST 16, 2004, London -- Global Crossing
(NASDAQ: GLBCE) announced today that it has consummated
a series of agreements, which the company values
at up to $132 million, with Bridgehouse Marine Ltd.
for the sale of wholly-owned subsidiary Global Marine
Systems and the transfer of its 49 percent shareholding
in S. B. Submarine Systems Company Ltd (SBSS) to
Global Marine. As a result of these transactions
Global Crossing will receive consideration of up
to $14.8 million, and Bridgehouse will assume $117
million of Global Marine capital lease debt, which
had been carried on Global Crossing’s consolidated
balance sheet. In addition, all operating lease
commitments for the Global Marine fleet will remain
with Global Marine.
“Global Crossing
is keenly focused on becoming the market leader
in global IP connectivity solutions for enterprise
customers, building upon our unique network and
technology advantages,” commented John Legere,
Global Crossing’s CEO. “New ownership
will enable Global Marine to pursue diverse markets
beyond telecom for its services, while we concentrate
our energies on acquiring enterprise customers and
building our competitive advantage with IP solutions.
Today’s agreement with Bridgehouse Marine
is a win-win for both companies.”
In February 2004, Global Crossing retained Citigroup
Global Markets as its financial advisor to assist
in exploring strategic alternatives for Global Marine,
including its potential sale. After a six-month
review and discussions with several potential investors
and purchasers, Global Crossing determined that
a sale to Bridgehouse Marine would best serve the
strategic goals of both Global Crossing and its
marine technology subsidiary.
“Bridgehouse
Marine and its investors from Bridgehouse Capital
have tremendous experience in revitalizing companies
in difficult market sectors,” stated Phil
Metcalf, managing director, Europe for Global Crossing
and outgoing CEO of Global Marine. “As Global
Marine weathers the turbulent telecom storm and
pursues diverse markets such as oil and gas, the
Bridgehouse team will undoubtedly provide valuable
strategic counsel and new resources to the company.”
Global Crossing acquired its 49 percent interest
in SBSS in 1999, as part of its purchase of Global
Marine, and owns the venture in partnership with
China Telecom. As part of today’s agreement,
Global Crossing plans to transfer its shareholding
in SBSS to Global Marine, subject only to the approval
of China Telecom and Chinese regulatory review.
According to Andy Ruhan, Bridgehouse Capital's managing
director and a principal investor in Bridgehouse
Marine, Global Marine is the recognized market leader
in the submarine telecommunications industry and
has unparalleled expertise in marine technology.
“Taking the business to a new level by expanding
into diverse markets while maintaining its leadership
position in submarine installation and maintenance
is a challenge we are well-prepared to undertake,”
commented Mr. Ruhan.
Mr. Ruhan will be serving as chairman of Global
Marine and brings significant experience in leading
telecom-related businesses, including having previously
founded and served as CEO of Global Switch, the
world's largest carrier-neutral collocation company.
Global Crossing has also agreed to extend its commercial
agreement with Global Marine for the maintenance
of Global Crossing’s network for an additional
five years.
Bridgehouse Marine's CEO, Larry Schwartz, commented:
"We are particularly pleased that Global Crossing
has agreed to extend its commercial agreement with
Global Marine through 2012. We look forward to a
long-term, mutually successful commercial relationship
with Global Crossing."
ABOUT
BRIDGEHOUSE MARINE AND BRIDGEHOUSE CAPITAL
Bridgehouse Marine Limited was formed for the purpose
of acquiring and managing companies providing marine
services to the telecommunications and energy industries.
Bridgehouse Marine is backed by Andrew Ruhan and
Alan Campbell of Bridgehouse Capital, together with
Larry Schwartz of The Wenham Group, a Bridgehouse
affiliate. Bridgehouse Marine plans to grow through
a proactive acquisition strategy that will compliment
the organic growth initiatives of its operating
subsidiaries. Bridgehouse Capital is a leading London-based,
private equity investment advisory firm with a successful
track record of investing in and managing a wide-range
of asset-intensive and capital-intensive businesses.
Recent European and US investments of Bridgehouse
Capital and its principals have covered a wide range
of industries, including IP infrastructure and managed
services, commercial real estate, hotels, logistics
and insurance.
ABOUT GLOBAL MARINE
SYSTEMS
Global Marine Systems Limited (Global Marine) is
the world’s largest and most experienced submarine
cable maintenance and installation company. Global
Marine operates the world’s most advanced
fleet of cable ships and subsea vehicles, which
consist of 14 cable ships, 1 installation barge
and 34 submersible vehicles, not including joint
venture facilities.
Please visit www.globalmarinesystems.com
for more information.
ABOUT SBSS
S. B. Submarine Systems was formed in 1995, and
is a key provider of submarine cable installation
and maintenance services throughout Asia from its
headquarters in Shanghai. The company owns and operates
three vessels and four submersible vehicles, and
has been successfully pursuing opportunities in
the oil and gas industry to complement its strong
track record in telecommunications.
Please visit www.sbsubmarinesystems.com
for more information.
ABOUT GLOBAL
CROSSING
Global Crossing (NASDAQ: GLBCE) provides telecommunications
solutions over the world's first integrated global
IP-based network. Its core network connects more
than 300 cities and 30 countries worldwide, and
delivers services to more than 500 major cities,
50 countries and 6 continents around the globe.
The company’s global sales and support model
matches the network footprint and, like the network,
delivers a consistent customer experience worldwide.
Global Crossing IP services are global in scale,
linking the world’s enterprises, governments
and carriers with customers, employees and partners
worldwide in a secure environment that is ideally
suited for IP-based business applications, allowing
e-commerce to thrive. The company offers a full
range of managed data and voice products including
Global Crossing IP VPN Service, Global Crossing
Managed Services and Global Crossing VoIP services,
to more than 40 percent of the Fortune 500, as well
as 700 carriers, mobile operators and ISPs.
Please visit www.globalcrossing.com
for more information.
# # #
Statements made in this press release that state
the company's intentions, beliefs, expectations,
or predictions for the future are forward-looking
statements. These statements contain words such
as "anticipate," "estimate,"
"expect," "project," "intend,"
"plan," "believe," "will,"
or similar expressions. Such statements are subject
to known and unknown risks, uncertainties and other
factors that could cause the actual results to differ
materially from those contemplated by the statements,
including the results of the ongoing review of the
company’s cost of access liabilities and cost
of access operating expenses and the related control
environment, and the impact of any restatement,
as well as the reaction of the company’s shareholders,
customers, vendors and prospective lenders; the
company's history of substantial operating losses
and the fact that, in the near term, funds from
operations will not satisfy cash requirements; the
ability of the company to arrange the necessary
financing to fund its liquidity requirements; the
likelihood that the prices the company charges for
its services will continue to decrease; the company's
ability to continue to connect its network to incumbent
carriers' networks or maintain Internet peering
arrangements on favorable terms; the consequences
of any inadvertent violation of the company's Network
Security Agreement with the U.S. Government; the
impact of actual and potential customers' bankruptcies
on the company's sales prospects and results of
operations; increased competition and pricing pressures
resulting from technology advances and regulatory
changes; competitive disadvantages relative to competitors
with superior resources; the impact on the company's
competitiveness of its technology choices; the company's
dependence on third parties for many functions;
political, legal and other risks due to the company's
substantial international operations; and other
risks referenced from time to time in the company's
filings with the Securities and Exchange Commission.
The company undertakes no duty to update information
contained in this press release or in other public
disclosures at any time. |
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