Softbank Asia Infrastructure Fund, Carlyle Group and two other partners hope to buy cash-strapped Asia Global Crossing Ltd for about 10 percent of the value of its assets.
The group is in "the early stages" of weighing a bid for the network operator, a unit of bankrupt Global Crossing Ltd, said Andrew Yan, president of the Softbank Corp fund. Yan, whose fund counts Cisco Systems Ltd as its leading investor, declined to value such a bid. The unit valued its net fixed assets at US$2.6 billion in a November filing.
A takeover may ensure the future of Asia Global Crossing's network of fiber-optic cables, which link eight Asian countries and carry data and voice communications to the US. The company, which is seeking investors after its parent refused a US$400 million loan, said last week that 19 companies have expressed interest in buying parts of its business.
A bid will have to wait until the results of a separate bidding process for Global Crossing, Yan said. A bid by the group, which also includes Citic Pacific Ltd and London-based Delta Associates, could set up a bidding contest with Hutchison Whampoa Ltd, which mounted a bid for Global Crossing and said last week it might also make an offer for the Asian unit.
Global Crossing controls the company with 59 percent, while founding partners Softbank and Microsoft Corp. both own 14.7 percent. The three control even more of the voting rights, with 65.8 percent, 16.4 percent and 16.4 percent respectively, according to a potential bidder who quoted from financial documents that Asia Global Crossing sent to the 19 interested companies.
Any bids made for Asia Global Crossing now might run into complications with offers for Global Crossing, due to be submitted to US Bankruptcy Judge Robert Gerber in Manhattan by June 20.
"The Global Crossing legal proceeding will have a lot of impact on how we do this," Yan said.
Asia Global Crossing spokeswoman Madelyn Smith wasn't available for comment. Citic Pacific Chairman Larry Yung said over the weekend that talks about a possible bid were still at an early stage.
The Asian network would "complement our own in Hong Kong," where Citic's network generated traffic of 200 million minutes a month last year, said Yung, who attended a business forum in southern China's Hainan Island over the weekend along with Yan.
While the Softbank's bid would be separate from any Hutchison-led offer, the two groups might eventually cooperate in dividing up the company, Yan said. Hutchison made its bid for Global Crossing in conjunction with Singapore Technologies Telemedia Pte.
"At some point we think it will come together, because Hutchison's interest is still in the Asian part," Yan said.
Demand for leasing capacity on the cables owned by Asia Global Crossing is likely to pick up as companies around the world stop investing in new capacity, Yan said.
The network operator hired Lazard LLC to find investors after Global Crossing refused to lend it US$400 million at the end of last year and sales slumped. The company has said it expects to post a loss for the fourth quarter and for all of 2001.
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