Global Crossing Ltd. (NYSE:GX) announced that the New York Public Service Commission has approved the sale of Global Crossing's incumbent local exchange carrier (ILEC) business to Citizens.
On April 17, the Federal Communications Commission (FCC) also announced its approval of applications filed by Global Crossing and Citizens Communications seeking to transfer to Citizens licenses and authorizations held by Global Crossing's ILEC. The applications sought FCC approval for transfer of control of a domestic Sec. 214 authorization, and international Sec. 214 authorization and a cable TV relay service.
All remaining regulatory approvals are expected to be received by the end of May of this year, with the closing of the deal expected in June.
Global Crossing's Chief Executive Officer, Tom Casey, said that the transaction streamlines Global Crossing's North American operations. "The proceeds from this transaction, which come to $3,266 per access line, complete the funding of our current business plan and will be used to reduce indebtedness and to invest in network and product capabilities."
The price of the transaction has been adjusted to $3.5 billion to reflect changes in certain terms of the deal, including an agreement for expedited closing of the transaction. The agreement to sell the assets to Citizens was originally set at $3.65 billion.
The agreement between the two companies was first announced on July 12 of last year. Global Crossing and Citizens also entered into a strategic agreement under which Global Crossing will provide long distance services to the ILEC business.
The Global Crossing ILEC assets comprise approximately 1,072,000 access lines, representing the tenth largest ILEC group in the United States. Approximately half of these operations are in the Rochester, New York area, with the remainder in 13 states. The ILEC business was acquired by Global Crossing as part of its acquisition of Frontier Corporation in the fall of 1999.
About Global Crossing:
Global Crossing Ltd. (NYSE:GX) provides integrated telecommunications solutions over a global IP-based fiber-optic network. For more information, visit www.globalcrossing.com or www.asiaglobalcrossing.com.