Singapore's STT to take control of Global Crossing

Singapore's STT to take control of Global Crossing

Agence France-Presse, Singapore

Singapore Technologies Telemedia (STT) said on Thursday it had
won approval to acquire a majority stake in bankrupt U.S.
telecoms group Global Crossing, ending a drawn-out bid that was
dogged by opposition from U.S. security and intelligence
services.

Global Crossing and STT issued a joint release saying the U.S.
Federal Communications Commission (FCC) had approved the
Singapore company's application to take control of the fiber-
optic firm.

"We're pleased to have received approval from the FCC," STT's
president and chief executive, Lee Theng Kiat, said in the
statement.

"Now we look forward to building on this progress to help
expand and strengthen Global Crossing's business in the United
States and worldwide."

Approval by U.S. regulators is the last hurdle for Global
Crossing's rise out of bankruptcy under U.S. laws after it filed
for bankruptcy protection in early 2002 with US$12.4 billion in
debt.

"Upon emergence from bankruptcy, Global Crossing will be well
positioned to continue integrating and building its services
worldwide, and expanding its relationships with existing and new
customers," Lee said.

Global Crossing chief executive John Legere described the
FCC's approval of the deal as a "major milestone".

"After 20 months of restructuring, Global Crossing is poised
to emerge with an unrivaled IP-based (internet protocol) network,
a growing portfolio of products and services, and a firm base of
75,000 customers," Legere said.

STT, a subsidiary of Singapore government investment arm
Temasek Holdings, had offered $250 million for 61.5 percent of
Global Crossing.

This would enable STT to take control of 160,000 route-
kilometers (99,200 miles) of state-of-the art submarine cables
that connect more than 200 cities. The network had cost $15
billion to build.

Officials from the FBI, CIA and the Pentagon, which use the
company's services, had objected to a foreign firm controlling a
firm seen as crucial to national security.

The U.S. Department of Homeland Security had also expressed
reservations about the deal as Global Crossing provides the
United States and its key allies with commercial and military
Internet links.

However U.S. President George W. Bush said last month he would
not block the bid following representations from Singapore Prime
Minister Goh Chok Tong.

An STT spokeswoman told AFP that to ensure security concerns
are protected, the deal includes a guarantee for U.S. law
enforcement agencies to access Global Crossing's network in the
United States for investigations.

Access by foreign governments to classified information
carried over the network will also be restricted, and the
company's board must be made up of U.S. citizens who have
obtained security clearances from U.S. authorities.

STT will also subject certain staff members to a screening
process agreed to by the U.S. justice, defense and homeland
security department.

These agencies will devise guidelines for visits to Global
Crossing facilities for security reasons, the spokeswoman added.

Hong Kong-based Hutchison Whampoa had earlier wanted to buy
Global Crossings but backed out after failing to ease U.S.
security concerns.

STT is also a major shareholder in Singapore's second largest
telecoms firm, StarHub, and Indonesia's Indosat.