Asia Global Crossing will sell its operations and assets to Asia Netcom, a new telecommunications company formed by a consortium of investors. The company will continue to operate and offer services to its customers under the new name, it said.
The main shareholder of Asia Netcom is China Netcom Corporation (Hong Kong), one of six large telecommunications companies that dominate the Chinese market after an extensive re-organisation earlier this year. Venture capital firms Newbridge Capital and Softbank Asia Infrastructure Fund are expected to take stakes in the new company, according to a company statement.
Asia Netcom will buy almost all of Asia Global Crossing's assets, including its East Asia Crossing sub-sea cable system, its management and employees, as well as its customer contracts.
"Based on the definitive agreement, the intent is that Asia Global Crossing will operate as a going concern, becoming Asia Netcom upon completion of the transaction," Asia Global Crossing said in the statement.
Two Asia Global Crossing units -- Asia Global Crossing (Bermuda) and Asia Global Crossing Development (Delaware) -- have filed for protection under Chapter 11 of the US Bankruptcy Code.
Asia Global Crossing is 58.8 per cent owned by Global Crossing, which filed for Chapter 11 bankruptcy protection in the US in January. Two Asian telecommunications companies, Singapore Technologies Telemedia and Hong Kong-based Hutchison Telecommunications have made a proposal to buy Global Crossing, but the acquisition is yet to be cleared by US authorities.