Global Crossing pressures Icahn, XO for documents
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July 8, 2003 Tuesday 6:52 AM
New York (CBS.MW) — Global Crossing pressured financier Carl Icahn and XO Communications to produce documents related to the pending regulatory approval of a buyout by Singapore Technologies Telemedia.
Global Crossing accused Icahn and XO of interfering with the regulatory process to stymie a buyout offer from ST Telemedia, according to court papers filed Monday.
ST Telemedia, the second largest telecom in Singapore, has agreed to pay $250 million for a 61.5 percent stake in Global Crossing. Last week, a U.S. bankruptcy judge ruled that ST Telemedia's talks with Global Crossing would remain exclusive until October. Icahn and some creditors had urged the judge overseeing Global Crossing's Chapter 11 proceeding to refuse an extension.
Global Crossing (GBLXQ), which filed for bankruptcy protection early last year, wants Icahn, XO and any company controlled or affiliated with them to produce documents — including e-mail and computer files — related to the regulatory approval of ST Telemedia's buyout. Global Crossing also wants all documents related to the employment of Carl Grivner, its former Chief Operating Officer who is now CEO of XO.
As evidence of Icahn's and XO's meddling, Global Crossing produced a June 12 letter sent to the Federal Communication Commission requesting that the regulator delay its review of ST Telemedia's purchase.
"XO urges the Commission to ensure that all interested parties have ample opportunity to assess the public interest implications of the ST Telemedia takeover of Global Crossing by extending the comment cycle in this proceeding until the DOJ [Department of Justice] and CFIUS [Committee on Foreign Investment in the U.S ] have concluded their review," XO Vice President Brian Oliver said in the letter.
Global Crossing has asked for a July 30 court date.
Last August, Hutchison Whampoa and ST Telemedia reached a joint deal to buy a 61.5 percent stake in Global Crossing for $250 million, which was approved by the bankruptcy court.
But in April, Hutchison (HUWHY) dropped out when a federal interagency group, the Committee on Foreign Investment in the U.S., said it would open a new investigation into the acquisition. Regulators had raised national security concerns regarding control of Global Crossing.
ST Telemedia then decided to go solo in its bid for a controlling interest in Global Crossing. But its deal still needs approval by CFIUS and the Federal Communications Commission.
The Pentagon is also set to oppose ST Telemedia's majority stake in Global Crossing, according to press reports.
In June, Icahn, as head of XO, made his interest in Global Crossing known when he made a $700 million cash and stock offer for the telecom carrier.
XO and Icahn did not return calls for comment Tuesday.
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