Tremors hit Global Crossing Asia
Fibre-optic cable communications operator Asia Global Crossing fears that it could follow its bankrupt US parent company.
Yesterday the company announced a plan to cut spending and renegotiate supply and construction contracts.
At the heart of the Asia Global Crossing’s woes was a decision by bankrupt parent Global Crossing not to let it draw down a £282m ($400m) credit facility leaving it facing shortage of cash.
Asia Global Crossing also warned that its auditors reviewing its financial statements would likely express ‘substantial doubt’ about its ability to continue.
Global Crossing filed for bankruptcy in the US on January 28 amid a US Securities and Exchange Commission and the FBI investigation into its accounting.
Asia Global Crossing was considered to be in better shape than its parent company but the latest disclosures are likely to raise concerns over the its future.
It was set up as a joint venture with Microsoft and Softbank in 1999 to tap the Asian market, has partnerships with several telecommunications operators in the region including Hong Kong-based conglomerate Hutchison Whampoa and Singapore Technologies Telemedia.
