Asia Global Crossing - formed last November as a joint venture between Global Crossing, Microsoft and Softbank - had been hoping to raise up to $900 million from a Nasdaq listing and $400 million from high yield debt. However, a decision to push the two issues back until September was taken this week after the company received 'comments' from the SEC as a result of its recent filing.
As one banker puts it: "The company knew that it only had a short window to access the market before it closes for the summer and when it realized it was going to miss it, it decided to hold back."
Goldman Sachs and Salomon Smith Barney are joint bookrunners for the equity portion, which comprises 53 million class-A common shares with a 7.95 million greenshoe. Indicative pricing had been pitched at $14 to $16.
For the debt portion, Chase Manhattan and Merrill Lynch have been mandated for a $400 million 10-year transaction, which is likely to carry either a BB- or high single-B rating, according to bankers.
In competition with Japan's NTT and Hong Kong's Pacific Century CyberWorks, Asia Global is hoping to become the region's first pan-Asian telecommunications carrier to provide integrated internet, data, voice and web-hosting services to wholesale and business customers. It owns 65% of Pacific Crossing-1, a fibre-optic subsea system connecting Japan and the United States, and is currently building East Asia Crossing, a 19,000 km fibre-optic subsea system interconnecting the whole Pacific Rim.
Global Crossing itself, is building a global internet protocol-based fibre-optic network, which will have more than 101,000 route miles, serving five continents, 27 countries and more than 200 major cities. For the first three months of the year, it reported recurring adjusted EBITDA of $401 million, up 23% from the fourth quarter's $325 million.
For the three months ended 31 March, Asia Global Crossing reported net income of $14.3 million on revenue of $75.8 million.
