BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in:  Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Wednesday, 27 February, 2002, 10:56 GMT
Global Crossing eyes bigger losses
Global Crossing logo graphics
Global Crossing was forced to delay its results
The bankrupt telecoms company Global Crossing has said it will post a "significant" loss for the final three months of 2001.

The deficit comes from a huge write down of the company's assets.

Global Crossing operates a worldwide network of fibre optic cables, which link more than 200 cities in 27 countries.

The company filed for bankruptcy protection last month, following several months of speculation about the company's financial position.

'Significant' write-off

Global Crossing said the write down would mean it would post a "significant net loss" for both the fourth quarter and 2001 as a whole.

The write-off reflected "remaining goodwill and other identifiable intangible assets (approximately $8bn) as well as a multi-billion dollar write-down of its tangible assets."

The company was due to release its fourth quarter results on Tuesday, but instead issued only revenue estimates.

It said it expected to post revenues of about $804m for the final three months of 2001, and revenues from continuing operations of $3.2bn for the whole year.

Funding problems

Meanwhile Asia Global Crossing, which is part-owned by the US company, said it expected to post a "material " loss for the last three months of 2001.

The company - which was not included in last month's bankruptcy filings - also said it lacked enough funding to cover its business plan.

But it said it had hired investment bank Lazard Freres to help it consider its options as it tries to raise extra funding.

Asia Global Crossing also said it had hired outside lawyers to investigate allegations of questionable accounting practices.

The US Securities and Exchange Commission (SEC) is already looking into claims that Global Crossing may have falsely boosted revenues by swapping network capacity.

Rise and fall

Global Crossing was regarded as one of the most promising of the new generation of telecoms companies which sprung up in the late 1990s.

But a combination of the economic slowdown, increased competition and heavy debts hit the company hard.

Last month it filed for bankruptcy protection in what was the fourth largest insolvency in US history.

See also:

11 Feb 02 | Business
Echoes of Enron in telecoms collapse
08 Feb 02 | Business
FBI launches Global Crossing probe
08 Feb 02 | Business
Markets suffer from 'Enronitis'
07 Feb 02 | Business
Global Crossing to rise from ashes
05 Feb 02 | Business
Global Crossing accounts probed
28 Jan 02 | Business
Global Crossing files for bankruptcy
14 Jan 02 | Business
Audit giants called to account
14 Dec 01 | Business
Global Crossing bankruptcy fears
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories