PHILADELPHIA: Singapore Technologies Telemedia Pte Ltd (ST Telemedia) is to increase its planned investment in bankrupt telecoms carrier Global Crossing Ltd after Hong Kong partner Hutchison Whampoa Ltd pulled out of the deal due to US regulatory resistance.
ST Telemedia would double its investment to US$250mil to buy a 61.5% ownership interest in the reorganised Global Crossing, the two companies said in a statement.
The moves taken by ST Telemedia and Hutchison would not change distributions to creditors under Global Crossing’s Chapter 11 Plan of Reorganisation, which had been accepted by creditors and confirmed by the US Bankruptcy Court last December, the statement added.
Hutchison decided to walk away after the US government intensified its formal probe of the deal. US national security officials had balked at Hutchison’s ties to China despite the company’s offer to distance itself from the daily operations of Global Crossing, sources familiar with the situation said.
The new pact with ST Telemedia, however, may still face objections from US lawmakers as the company is a unit of Temasek Holdings Ltd, the investment arm of the Singapore government.
US law restricts the purchase of an American telecoms operator by a company that is owned or controlled by a foreign government. ST Telemedia would need a waiver to complete the deal. – Reuters