The agreement with Hutchison Whampoa and Singapore Technologies, much smaller than an offer previously rejected by Global Crossing's banks and creditors, was approved by the bankruptcy judge overseeing the case.
An outside financial adviser to Global Crossing who was called to testify at a hastily scheduled hearing early Friday said only three credible bids had been received during a lengthy auction process and that bidders were spooked by the ongoing collapse of the business.
"It's a very difficult world today in the telecommunications industry," said Arthur Newman, the senior managing director in charge of the restructuring for the Blackstone Group.
The Asian companies have agreed to invest $250 million in cash in Global Crossing's business. In addition, they will pay $300 million in cash and issue $200 million in notes to Global Crossings assorted lenders and creditors.
The investors will hold a controlling 61.5 percent stake in the new Global Crossing that emerges from bankruptcy, possibly early next year. Under the earlier deal that was rejected, the investors would have walked away with a 79 percent stake.
Six percent of the equity will go to lenders and 32.5 percent will go to unsecured creditors. Owners of Global Crossing stock will receive nothing.
Global Crossing, whose bankruptcy is the fourth-largest ever in the United States, piled up $12.4 billion in debts building a vast worldwide communications network at the height of the Internet boom.
Most of the company's $12 billion debt comes from building a fiber-optic network that spans 100,000 miles, connecting more than 200 cities in 27 countries around the world. The Bermuda-based firm had hoped to dominate the market for high-speed data communications, and at one point, enthusiastic investors boosted the company's value to nearly $50 billion.
While few networks compare in size, the building frenzy of the past few years left a glut of capacity that forced down prices for bandwidth. At the same time, the collapse of the Web economy eliminated a driving force for the explosion of online traffic that Global Crossing and its rivals were counting on to jam their networks.
Still, even in the current environment, the flow of Web usage and electronic commerce continues to grow at a steady clip.
That reality explains why certain players seem willing to buy Global Crossing's assets for what amounts to a steep discount from their original cost, but a hefty price tag nonetheless.