August 16, 2004 London -- Global Crossing announced today that it has consummated a series of agreements, which the company values at up to $132 million, with Bridgehouse Marine Ltd. for the sale of wholly-owned subsidiary Global Marine Systems and the transfer of its 49% shareholding in S. B. Submarine Systems Company Ltd. (SBSS) to Global Marine.
As a result of these transactions Global Crossing will receive consideration of up to $14.8 million, and Bridgehouse will assume $117 million of Global Marine capital lease debt, which had been carried on Global Crossing's consolidated balance sheet. In addition, all operating lease commitments for the Global Marine fleet will remain with Global Marine.
"Global Crossing is keenly focused on becoming the market leader in global IP connectivity solutions for enterprise customers, building upon our unique network and technology advantages," explains John Legere, Global Crossing's CEO. "New ownership will enable Global Marine to pursue diverse markets beyond telecom for its services, while we concentrate our energies on acquiring enterprise customers and building our competitive advantage with IP solutions. Today's agreement with Bridgehouse Marine is a win-win for both companies."
In February 2004, Global Crossing retained Citigroup Global Markets as its financial advisor to assist in exploring strategic alternatives for Global Marine, including its potential sale. After a six-month review and discussions with several potential investors and purchasers, Global Crossing determined that a sale to Bridgehouse Marine would best serve the strategic goals of both Global Crossing and its marine technology subsidiary.
"Bridgehouse Marine and its investors from Bridgehouse Capital have tremendous experience in revitalizing companies in difficult market sectors," asserts Phil Metcalf, managing director, Europe for Global Crossing and outgoing CEO of Global Marine. "As Global Marine weathers the turbulent telecom storm and pursues diverse markets such as oil and gas, the Bridgehouse team will undoubtedly provide valuable strategic counsel and new resources to the company."
Global Crossing acquired its 49% interest in SBSS in 1999, as part of its purchase of Global Marine, and owns the venture in partnership with China Telecom. As part of today's agreement, Global Crossing plans to transfer its shareholding in SBSS to Global Marine, subject only to the approval of China Telecom and Chinese regulatory review.
According to Andy Ruhan, Bridgehouse Capital's managing director and a principal investor in Bridgehouse Marine, Global Marine is the recognized market leader in the submarine telecommunications industry. "Taking the business to a new level by expanding into diverse markets while maintaining its leadership position in submarine installation and maintenance is a challenge we are well-prepared to undertake," he says.
Ruhan will be serving as chairman of Global Marine and brings significant experience in telecom-related businesses, including having previously founded and served as CEO of Global Switch, the world's largest carrier-neutral collocation company.
Global Crossing has also agreed to extend its commercial agreement with Global Marine for the maintenance of Global Crossing's network for an additional five years. "We are particularly pleased that Global Crossing has agreed to extend its commercial agreement with Global Marine through 2012," adds Larry Schwartz, Bridgehouse Marine's CEO. "We look forward to a long-term, mutually successful commercial relationship with Global Crossing."