GST Telecom selling assets
By Frank Cho
Advertiser Staff Writer
Bankrupt voice and data telecommunications company GST Telecom Hawaii will sell substantially all of its assets to a subsidiary of Japanese trading giant Tomen Corp.
The U.S. Bankruptcy Court in Delaware yesterday approved the sale of assets to TM Communications Hawaii LLC. The sale still requires federal and state regulatory approval.
The deal brings back a number of former GST executives to help run the Hawai'i operations, including former president John Warta and Hawai'i regional vice president Rob Volker.
"This is a wonderful homecoming for us as we renew our commitment to Hawai'i and the local telecom industry," Volker said in a statement today.
The price of the acquisition was not disclosed.
GST Telecom, which has been for sale since 1999, was a subsidiary of Vancouver, Wash.-based GST Telecommunications Inc., which last year ran out of cash and filed for Chapter 11 bankruptcy protection May 17.
GST had spent tens of millions of dollars in the 1990s to develop a fiber-optic connection between the six major Hawaiian islands and was one of only two companies that used its own wire-based network to compete with Verizon Hawaii, the state's dominant carrier. Oceanic Communications is the other.
GST had planned to eventually go head-to-head with Verizon in business and residential markets, but, like other telecom players, it never widely offered residential service.
In addition to operating the interisland network, GST provides phone service to local businesses and operates an Internet service provider, GST Hawaii OnLine.
Tomen, which was the senior secured creditor of GST's Hawai'i assets, and NextNet Investments, a Warta company, plan to form a new Hawai'i-based partnership to run GST Hawai'i.
The new company will take over GST Hawaii's operations Tuesday.
The company's existing staff of about 40 employees will be retained and Jeff Roe, who has been the general manager for GST Hawaii since December, will also stay on.
The company's new name has not been determined yet, a spokesman for the company said today.
As part of the assets, the new owners will also get GST's Hawaii Online Internet Service.
The bulk of GST Telecommunications' Mainland business was sold to Time Warner Telecom Inc., a provider of telephone and Internet service to businesses, for $690 million in January.
Much of GST Hawai'i's interisland fiber-optic network was excluded from the sale, but Time Warner subsidiary Oceanic Communications did acquire a portion of the Hawai'i network in that deal.
Frank Cho can be reached by phone at 525-8088, or by e-mail at fcho@honoluluadvertiser.com
