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Wednesday, 10 April, 2002, 19:33 GMT 20:33 UK
Global Crossing writes off $8bn
Global Crossing chief executive John Legere (left) and chief financial officer Dan Cohrs
Global Crossing execs said the firm is "no Enron"
Bankrupt telecoms carrier Global Crossing is to write off $8bn for the final three months of last year, to make up for the precipitous drop in the value of some of its assets.

The write-offs represent goodwill - the part of the cost of an acquisition which is over and above the value of its real-world assets.

Like many telecoms and technology companies, Global Crossing - which built a business laying huge-capacity fibre-optic cables around the world - went on an acquisition spree to extend its operations.

But the crash in tech valuations since early 2000 means most are now having to admit to paying way over the odds.

Global Crossing also said it will write off billions in tangible assets, although it would not provide more details of when or how much.

Leak

The news comes as reports in the New York Times claim the company has accidentally tipped off all the 50 or so companies considering taking it over to the identities of all the others.

The expressions of interest were meant to be confidential. But the paper says the company inadvertently sent an email to all interested parties - and neglected to make sure that the addressees were hidden from one another.

According to the Times, potential bidders include Verizon, the UK's British Telecom, Spain's Telefonica, Telefonos de Mexico (Telmex), and Germany's Deutsche Telekom.

Non-telecoms possibilities include the Carlyle Group, the defence and technology investment group dominated by former Republican politicians and at least one ex-president, and Canada's Imperial Bank of Commerce

Hong Kong telecoms-to-property conglomerate Hutchison Whampoa has already said it is interested in buying Asia Global Crossing, the Pacific subsidiary.

Federal probe

Global Crossing filed for bankruptcy protection from its creditors on 28 January with liabilities totalling $12bn and assets worth $22.4bn.

Its expansive plans were predicated on a relentless growth in demand for network capacity, but technical advances and massive competition mean the expected demand has evaporated.

US lawmakers and federal regulators have been investigating the collapse, wondering whether Global Crossing is another case of a company flattering its figures.

They are keenly interested in finding out more about "capacity swaps", in which carriers exchange capacity in complementary parts of the world without actually exchanging money - even though the swap is shown as revenue.

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