Financially troubled Asia Global Crossing Ltd. will sell its business and assets to Asia Netcom Corp., a planned joint venture to be set up by a group of investors, Asia Global Crossing's Japanese unit said Monday.
To facilitate the deal, the undersea-cable operator filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York on Sunday, the unit said.
Asia Global Crossing is an affiliate of Global Crossing Ltd. of the United States, which filed for Chapter 11 protection in the same court on Jan. 28. Softbank Corp. and Microsoft Corp. of the U.S. are also major shareholders of Asia Global Crossing.
Asia Netcom will be launched by a consortium of investors led by China Netcom Corp., a leading Chinese telecommunications firm based in Hong Kong.
The consortium also includes U.S. investment firm Newbridge Capital Ltd. and the Softbank Asia Infrastructure Fund, an investment fund established by Softbank, U.S. network equipment maker Cisco Systems Inc., and other concerns.
It has prepared capital of $120 million and secured a commitment line of $150 million in credit from banks to implement the purchase of Asia Global Crossing by March 31, the investors said.
Asia Global Crossing will continue operating under its management, its Japanese unit said.
Global Crossing has built a global fiber-optic network linking 200 cities in 27 countries but has also accumulated a mountain of debt.