7/1/03
XO Issues Statement Regarding Today's Court Ruling
Reston, VA - XO Communications, Inc. announced that it is disappointed by the U.S. Bankruptcy Court’s ruling today regarding the decision to approve Amendment #2 to the Purchase Agreement and to extend the exclusivity period in the Global Crossing Chapter 11 case. XO remains highly skeptical that Singapore Technologies Telemedia PTE will be able to obtain the needed regulatory approvals to consummate this transaction. Furthermore, XO agrees with the many critics of this transaction that a Company of this magnitude and importance should not be owned and controlled by an entity owned by a foreign government.
“As we stated earlier, we believe that Global Crossing’s prolonged bankruptcy and dwindling cash reserves are expected to result in continued erosion of its customer base unless an alternative offer is put in place,” said Brian Oliver, EVP Strategy and Corporate Development at XO. “XO has been through the bankruptcy process and understands the necessity of having a plan for emergence that provides customers, vendors and employees with certainty.”
According to Global Crossing’s May Monthly Operating Report filed with the Bankruptcy Court, the company‘s cash burn totaled $48 million in May 2003. Indeed, in the opinion issued by the Bankruptcy Court today, the Court acknowledged that “[b]ased on present cash flow projections, that (running out of [unrestricted] cash) would be likely to happen sometime in October.” Given Global Crossings liquidity position, the payment of $50 million in bonuses to management and certain employees is now subject to fair debate. XO will continue to actively monitor both the bankruptcy and regulatory proceedings.
About XO Communications
XO Communications is a leading broadband communications service provider offering a complete set of communications services, including: local and long distance voice, Internet access, Virtual Private Networking (VPN), Ethernet, Wavelength, Web Hosting and Integrated voice and data services. XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships in the United States. XO currently offers facilities-based broadband communications services in more than 60 markets throughout the United States.
For more information contact:
Kara Palamaras/ XO Communications
Media and Industry Analysts
703-547-2011
