Asia GlobalX sold to China Netcom

Fiber Optics Weekly Update, Nov 22, 2002

Asia Global Crossing Ltd. announced that it has signed a definitive agreement to sell substantially all of its operations and assets to Asia Netcom, a new company organized by China Netcom and expected to include Newbridge Capital and Softbank Asia Infrastructure Fund as co-investors. As part of the agreement and to facilitate the restructuring process, certain Asia Global Crossing entities filed for Chapter 11 protection in the United States Bankruptcy Court for the Southern District of New York and coordinated proceedings in the Supreme Court of Bermuda.

Operations will continue uninterrupted during the reorganization, and customers will not experience any change in service. Asia Global Crossing's management team and employee base will remain in place and will continue towards the company's objective of providing cost-efficient network infrastructure and data communications services to enterprise and carrier customers throughout Asia.

Under the terms of the agreement, Asia Netcom will acquire substantially all of Asia Global Crossing's operating subsidiaries, excluding Pacific Crossing Ltd. and related entities. Completion of the transactions is conditioned on, among other things, the approval by the courts in the US and Bermuda as well as certain foreign regulatory approvals.

In connection with the proposed transaction, Asia Global Crossing's principal vendors have agreed to restructure the obligations owed to them. The new company will assume these obligations as well as customer contracts and operating liabilities of the acquired entities. It is expected that, upon completion of the transaction, approximately US$80 million of residual cash will be retained by Asia Global Crossing to pay its other creditors and to settle certain expenses in the Chapter 11 case and the Bermuda proceeding. No recovery is expected for Asia Global Crossing shareholders. Asia Netcom will be funded by US$120 million of new equity from the consortium members and additional bank financing, for the future operations of the company. The parties expect the Asia Netcom transaction to close during the first quarter of 2003.