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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 8, 1999
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Global Crossing Ltd.
(Exact name of registrant as specified in its charter)
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Bermuda 000-24565 98-0189783
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
Wessex House, 45 Reid Street
Hamilton, Bermuda HM12
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (441) 296-8600
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Item 5. Other Events
On September 8, 1999, Global Crossing Ltd., a Bermuda company ("Global
Crossing"), Microsoft Corp., a Washington corporation ("Microsoft"), and
Softbank Corp., a Japanese corporation ("Softbank"), established a new joint
venture company called Asia Global Crossing. A copy of the joint press release
of Global Crossing, Microsoft and Softbank, dated September 8, 1999, is attached
as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 7. Financial Statement and Exhibits.
(c) Exhibits.
99.1 Joint Press Release of Global Crossing Ltd., Microsoft Corp.
and Softbank Corp., dated September 8, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
GLOBAL CROSSING LTD.
Dated: September 10, 1999 By: /s/ Dan J. Cohrs
_____________________________________
Name: Dan J. Cohrs
Title: Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Joint Press Release of Global Crossing Ltd.,
Microsoft Corp. and Softbank Corp., dated September
8, 1999.
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Exhibit 99.1
Global Crossing, Softbank and Microsoft Establish Joint Venture Company To Build
Telecom Network Providing Advanced Services Throughout Asia
Global Crossing contributes its interest in Pacific Crossing 1 system;
Softbank and Microsoft contribute $350 million and make $200 million capacity
commitment.
Will initially build $1.3 billion broadband East Asia Crossing network
connected by Pacific Crossing 1 to U.S. and remainder of Global Crossing's
worldwide network.
Japan, China, Singapore, Hong Kong, Korea, Taiwan, the Philippines and
Malaysia will be linked by East Asia Crossing's 17,700-kilometer undersea and
terrestrial network.
Will include terrestrial links and city rings as well as undersea cables;
provide web hosting, e-commerce and other Internet services as well as low-cost
telephony.
HAMILTON, Bermuda, TOKYO and REDMOND, Wash., Sept. 8, 1999 -- Three
global technology leaders, Global Crossing Ltd. (Nasdaq: GLBX - news), Softbank
(Tokyo Stock Exchange: 9984), and Microsoft (Nasdaq: MSFT - news) today
announced they have established a new joint venture company called Asia Global
Crossing that will provide advanced network-based telecommunications services to
businesses and consumers throughout Asia in the years ahead. Global Crossing
will be responsible for the management and operation of the network.
The venture will initially construct a 17,700-kilometer terrestrial and
undersea network called East Asia Crossing that will link Japan, China,
Singapore, Hong Kong, Taiwan, South Korea, Malaysia and the Philippines with
unique broadband functionality and connect these fast-growing markets to Global
Crossing's worldwide fiber-optic network serving North America, Europe and South
America.
Asia Global Crossing plans to build high-capacity city rings and
terrestrial systems linked with undersea cables to provide unprecedented global
connectivity and give Asia access for the first time to a broadband, seamless
global network offering an array of services, including state-of-the-art
telehouses, web hosting, electronic commerce and other advanced services as well
as low-cost, high-quality telephony in competition with local incumbent
carriers.
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Global Crossing will contribute to the venture its 57.75% share of
Pacific Crossing 1, a high-capacity, 21,000-kilometer trans-Pacific subsea loop
with two landing stations in Japan and two landing stations on the U.S. West
Coast that is expected to reach initial operating status within four months.
Global Crossing will also contribute its development rights in East Asia
Crossing. Softbank and Microsoft will each contribute $175 million in cash to
Asia Global Crossing. In addition, Softbank and Microsoft have also committed to
make a total of at least $200 million in Global Crossing Network capacity
purchases over a three-year period, expected to be utilized primarily on the
Pacific Crossing system and East Asia Crossing. Softbank and Microsoft have also
agreed to use Asia Global Crossing's network in the region.
Global Crossing will initially own 93% of Asia Global Crossing with
Softbank and Microsoft each owning 3.5%. When the fair market value of Asia
Global Crossing exceeds $5 billion, the ownership interest of Softbank and
Microsoft will increase to a maximum of 19% each at a valuation of $7.5 billion
and above.
Global Crossing Vice Chairman Jack Scanlon will be CEO of Asia Global
Crossing. Global Crossing will control a majority of seats on the Board of
Directors of Asia Global Crossing.
Asia Global Crossing will finance the East Asia Crossing network,
which is expected to have capital costs of approximately $1.28 billion over the
next two years, and its other future projects independently of its three
partners. The partners currently intend to take Asia Global Crossing public and
to bring in local partners as appropriate in certain countries.
"As we target the enormous long-term market opportunity in Asia and
look to complete the last major piece of our global network, the preeminent
software company in the world and the largest Internet provider in Asia are the
right partners for Global Crossing," said Gary Winnick, founder and co-chairman
of Global Crossing. "Asia has half of the world's population and is the fastest
growing region in the world, but its telecom infrastructure has not kept up.
Together with Softbank and Microsoft, two dynamic competitors who share our
focus on customers and on shareholder value, we intend to develop the region's
most advanced backbone and ultimately to connect all of Asia to the Global
Crossing network, offering these expanding markets access to a full range of
sophisticated telecommunications services."
East Asia Crossing will be built in two phases, forming interconnected
rings totaling 17,700 kilometers. Phase One, a length of 10,200 kilometers, to
be completed by year-end 2000, will link with Pacific Crossing 1 at a landing
station in Japan and connect with Taiwan, Singapore, Hong Kong, Malaysia, and
the Philippines. Phase Two, a length of 7,500 kilometers, to be completed by
June 2001, will link Japan to two stations in China, one in South Korea and one
in Taiwan. East Asia Crossing will feature a state-of-the-art undersea cable
with four fiber pairs, offering 80 Gbps (gigabits per second) of initial
capacity. The system is upgradeable to 1.2 Tbps (terabits per second) through
dense wavelength division multiplexing (DWDM).
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Pacific Crossing 1, which will also be operated by Asia Global
Crossing when it is completed, will link East Asia Crossing to the remainder of
Global Crossing's global network, which will soon reach major business centers
in the U.S., Europe, and Latin America.
Beyond the initial installation of the East Asia Crossing network,
Global Crossing, Microsoft and Softbank intend their joint venture to expand
both subsea and terrestrial fiber optic buildouts throughout an area that
extends west to include Thailand, and south to Indonesia. The venture will also
pursue further buildouts of the network within key Asian cities.
"This agreement brings Global Crossing into partnership in Asia with
two of the most advanced and influential technology companies in the world,"
said Bob Annunziata, chief executive officer of Global Crossing. "Both have
strong capabilities and a long-term approach to the market. We look forward to
Asia Global Crossing receiving the benefit of their technological expertise.
Together, we are well positioned to be Asia's premier supplier of data-centric
products and services. We will aggressively pursue the same strategy Global
Crossing is successfully employing elsewhere: city-to-city and then building-to-
building in key markets."
Said Steve Ballmer, president of Microsoft: "The future of our
business and telecommunications is increasingly linked, and our interest in the
telecom field is broad. Our strategy is to partner with providers who can
provide the interconnectivity we need to deliver advanced broadband services and
software. Asia provides one of the richest markets for us and yet is currently
underserved in gaining access to the global telecommunications system. Global
Crossing and Softbank have complementary capabilities that make them ideal
partners for Microsoft in this critically important part of the world."
"The Asian economy is moving rapidly into the Internet era, and
Softbank has been at the forefront of this revolution," added Masayoshi Son,
president and chief executive officer of Softbank Corporation. "A critical,
enabling component of this new economy is access to massive bandwidth on a
global basis. The "SpeedNet" joint-venture that we announced recently with
Microsoft and TEPCO, the Tokyo Electric Power Company, will provide low cost,
broadband access for major metropolitan areas, complementing the Asia Global
Crossing venture which provides this capacity on a global basis. We are very
pleased to be able to team with two market leaders -- Global Crossing and
Microsoft -- to launch this exciting new venture."
Goldman Sachs & Co. served as financial advisor to Microsoft and
Softbank. Salomon Smith Barney Inc. served as financial advisor to Global
Crossing.
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About Global Crossing
Global Crossing is building and operating the world's most advanced
global IP-based data-centric network, an end-to-end fiber optic platform for
data, voice, video and Internet transmissions. The Global Crossing Network will
span five continents and address 80 percent of the world's international
traffic. A new unit of Global Crossing, Global Marine Systems Limited, possesses
the largest fleet of cable laying and maintenance vessels in the world and
currently services more than a third of the world's undersea cable kilometers.
Global Crossing's operations are headquartered in Hamilton, Bermuda, with
executive offices in Los Angeles.
About Microsoft
Founded in 1975, Microsoft is the worldwide leader in software for
personal computers. The company offers a wide range of products and services for
business and personal use, each designed with the mission of making it easier
and more enjoyable for people to take advantage of the full power of personal
computing every day.
About Softbank
Softbank Corporation has emerged as one of the world's leading
Internet market forces. Through its ownership positions in more than 100
Internet companies and its unique Internet-zaibatsu management concept, it is
able to create market synergies for its family of companies on a global scale.
In Japan its activities encompass distribution, publishing, Internet media
platforms, a broad range of e-commerce businesses, and joint ventures with
companies such as Microsoft Corporation, Cisco, Yahoo! Inc., the Nasdaq
Stockmarket, and many other market leaders. In the US, Softbank is the largest
shareholder in leading Internet companies such as Yahoo! Inc., E*TRADE Group,
Inc. and ZDNet, and in Europe has established Internet joint ventures with News
Corp and Vivendi.
Statements made in this press release that state the company's or
management's intentions, beliefs, expectations, or predictions for the future
are forward-looking statements. It is important to note that the company's
actual results could differ materially from those projected in such forward-
looking statements. Information concerning factors that could cause actual
results to differ materially from those in the forward-looking statements is
contained from time to time in the company's filings with the U.S. Securities
and Exchange Commission (SEC). Copies of these filings may be obtained by
contacting the company or the SEC.
# # #
Investors and analysts may contact:
Jensen Chow
310/385-5283
E-mail: [email protected]
Reporters and editors may contact:
Tom Goff
310/385-5231
E-mail: [email protected]
