Asia Global Crossing Ltd, 58 percent owned by bankrupt communications network operator Global Crossing Ltd, said it's trying to raise money to stay afloat and may become part of US probes into its parent's accounting practices.
The company hired Lazard LLC to raise funds after slower sales and Global Crossing's refusal in December to lend US$400 million meant it "no longer has a fully funded business plan," the company said in a statement.
The statement was the first sign Global Crossing's Asian unit also faces financial strains and may raise doubt over a bid by Hutchison Whampoa Ltd and Singapore Technologies Telemedia Pte to buy the parent, which filed for bankruptcy last month with debt of US$12.4 billion. They already face a challenge from shareholders led by KAB Group LLC.
Hutchison, controlled by Hong Kong billionaire Li Ka-shing, and ST Telemedia hold stakes in Asia Global Crossing and are its partners in local ventures.
The two Asian companies are offering to buy 79 percent of its parent for US$750 million, plus payments to creditors of US$1.1 billion of new debt, cash and shares. KAB Group proposed a plan that would allow Global Crossing to raise as much as US$5.5 billion in three years.
Hutchison said the announcement won't change its plans.
Asia Global Crossing expects to post a loss for the fourth quarter.
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