Softbank Asia Infrastructure Fund, a venture of Softbank Corp and Cisco Systems Inc, said it and the company's partners won't bid for communications network operator Asia Global Crossing Ltd.
Hong Kong billionaire Li Ka-shing's Hutchison Whampoa Ltd also said it won't make an offer after saying it would. Asia Global Crossing runs a 40,000km network of undersea cables linking eight Asian countries to the US.
Asia Global Crossing invited bids that were due by today to raise money so it can stay afloat after parent Global Crossing Ltd refused to lend US$400 million and filed for US bankruptcy protection in January. The Asian unit said in February that it had hired investment bank Lazard LLC to help find funding.
"In the future, whether we bid or not totally depends on the legal proceedings of the parent company and the current bidding going on," Andrew Yan, president of the Softbank fund, said in a telephone interview.
The Softbank fund's pullout shows the difficulties investors face in valuing Hamilton, Bermuda-based Asia Global Crossing.
Global Crossing, which owns 59 percent of the Asian unit, also may face a bidding contest. The Asian unit is reorganizing the debt of Pacific Crossing Ltd, which owns its key link to the US West Coast.
The Softbank fund said in April it was weighing a bid for Asia Global Crossing in conjunction with the US-based Carlyle Group, Hong Kong-based Citic Pacific Ltd and London-based Delta Associates. Spokesman for the Softbank partners couldn't be reached for comment on the withdrawal.
The fund is a venture between Softbank Corp, Japan's biggest Internet investment company, and Cisco, the world's largest maker of computer networking equipment. Softbank Corp. is a founding partner of Asia Global Crossing, along with Microsoft Corp Both own 14.7 percent.
One Cisco shareholder said it would have been a bad idea for the San Jose, California-based company to own a stake in a prospective client.
"It's obviously not a good idea to own your customers or potential customers" because of conflicts of interest, said Shawn Campbell, a telecommunications-equipment analyst at Northern Trust Corp, which manages US$337 billion and held 54.7 million Cisco shares on March 31.
"It hasn't been a good idea to own anything in the [telecommunications] service provider space," Campbell said.
Asia Global Crossing has said it may issue new shares to dilute Global Crossing's stake, enabling a change of control.
Global Crossing, which is trying to emerge from Chapter 11 bankruptcy protection in the US, will help determine Asia Global Crossing's fate, Chief Executive Officer John Legere said in an interview.
"The process is not going to close itself off and come to a conclusion without the ability for Global Crossing to participate," Legere said yesterday. "At the time that investors come into Global Crossing," they will determine how the company will "support" Asia Global Crossing, he said.
One possible scenario, he said, would be "having these companies eventually operating together." He didn't elaborate.
Madelyn Smith, an Asia Global Crossing spokeswoman, declined to say how many bids the company has received.
The company said last month that potential investors had fallen to nine from an initial 19.
"Management and our advisers are receiving a number of bids today, and we expect to announce more details early next week," Smith said.
China Netcom Communication Group Corp, China's second-biggest fixed-line telephone company, said this week that it plans to bid. Purple Communications Ltd, a closely held, Hong Kong-based telecommunications company, also plans to make an offer, the Asian Wall Street Journal reported earlier today.
Hutchison, a ports and tele-communications group, said in April it was considering an offer. The company said yesterday that it won't make one.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
RSS