IDT may buy fiber-optic network assets

By Don Stancavish
Bloomberg News Service

NEWARK, N.J. — IDT Corp., a long-distance telephone and Internet services company, is interested in buying assets from Global Crossing Ltd., a fiber-optic network operator that sought bankruptcy protection on Monday, a spokes-man said.

IDT is in "preliminary talks with management" and is "interested" in buying Global Crossing's Frontier Networks telephone services business, spokesman Gil Nielsen said. IDT is a Global Crossing customer, he said.

Dan Coulter, a Global Crossing spokesman, said, "We don't think it's appropriate for us to comment on the content of those discussions, but within the confines of the process we've just entered with the court, we're happy to talk with them about any proposal they might have."

Global Crossing, owner of a fiber-optic communications network in the United States, Europe and Asia, filed for protection after piling up $12 billion in debt that it was unable to repay because of falling sales. The company agreed to a $750 million takeover by Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Ltd., a move that will wipe out equity investors.

Global Crossing Chief Executive John Legere said the company is required to review competing bids during bankruptcy proceedings. "If some other proposal comes along, it would have to be entertained," he said in an interview.

IDT last month acquired the operating assets of Winstar Communications Inc. for $42.5 million as part of Winstar's Chapter 11 court proceedings. Winstar, a wireless phone-services provider, filed in April. IDT had $1.1 billion in cash as of Oct. 31, Nielsen said. The company also sells prepaid calling cards.

Global Crossing paid $10.3 billion for Frontier Corp., at the time the fifth-largest local-phone company.

A bankruptcy court must approve the takeover by Hutchison and ST Telemedia Ltd., Global Crossing said. The bankruptcy filing is the biggest by a U.S. telecommunications company and the fourth-largest Chapter 11 case in U.S. history, behind Enron Corp., Texaco Inc. and Financial Corp. of America, according to Boston- based BankruptcyData.com.

Global Crossing listed $12.4 billion in debts in documents filed in U.S. bankruptcy court in Manhattan.