COMMAXXESS, Inc. Offers to Acquire Global Crossing for $815 Million

Washington, DC (PRWEB) June 12, 2003 -- COMMAXXESS, Inc. (COMMAX") today announced that it has made an offer to acquire all of the assets of Global Crossing LTD., and Global Crossing Holdings LTD, collectively (Global Crossing") for consideration of over $800 million cash plus conversion of creditor claims into Newco equity shares. The COMMAXXESS offer increases the proceeds available to creditors by over $300 million above the current bid by Singapore Technologies Telemedia PTE LTD and over $100 million above the Carl Icahn / XO Communications offer announced late Friday, May 30. The offer is being forwarded today to advisors for the Bondholders and Banks and the Company and notice provided to the U.S. Trustee and Court.

The Offer also provides that the Global Crossing preferred and common shareholders that are to receive nothing under the STT or Icahn proposals would receive 10% of the Newco stock. Additionally, the proposal would increase the priority claim payments to Ad Hoc Former Global Crossing employees who have lost their retirement plans by $10,000,000 if approved by the Bankruptcy Court in New York.

The Global Crossing creditors would receive an initial cash payment of $415,730,000 distributed quite differently than proposed by Global Crossing in its Disclosure Statement filed in December 2002 and approved by the Court. Additionally, the creditors would receive 30% of the Newco stock and a structured participation in revenues payable through a Creditors Trust of $80,000,000 minimum per year for five (5) years or an additional $400 million cash minimum exclusive of the value of the newco stock.

There are no preferred convertible shares and no high-yield Senior Notes to re-leverage the balance sheet under the COMMAX offer. The only lien on the assets would be COMMAXXESS lenders.

COMMAXXESS also stated that it has no plans to use the GCUK and GSM subsidiaries of Global Crossing as collateral for working capital loans unless absolutely necessary.

COMMAXXESS intends to petition the Bankruptcy Court to undertake the Purchase Agreement as a purchase subject to Chapter 11 plan not proposed by the Debtor and rescinding the prior order to grant STT and Hutchison a $30 to $50 million break up fee. The Purchase Agreement is not conditioned upon being subject to Chapter 11 plan" however certain features of the offer and transaction structure are better executed under a plan of reorganization working in collaboration with creditors.

In its evaluation for this offer, COMMAXXESS has learned that the $7.835 billion asset impairment that was apparently used to deny the shareholders Official Equity Committee status was a result of the acquisition of Frontier by Citizens in June 2001 and IPC Information Systems by Goldman Sachs in December 2001.

Additionally, following the purchase of Frontier Communications by Citizens Communications, $600,000,000 of Frontier debt was apparently left on the Global Crossing books. COMMAXXESS intends to possibly address that debt as an illegitimate claim against Global Crossing and that it should be appropriately transferred to Frontier / Citizens books or steps taken to dismiss the claim or recover Frontier and IPC Information Systems as assets of the debtor estate.

Certain parties appear to have been involved in a series of transactions involving Citizens, Century Communications, Centennial Communications, Frontier and Adelphia that raise questions about possible conflicts of interest that may exist within the Global Crossing bankruptcy case and how the $600,000,000 in Frontier debt was left on the Global Crossing books to be disposed of in bankruptcy.

This Purchase Agreement would also explore the advisability of assuming contract agreements with Asia Global Crossing, Charter Communications, Blackstone controlled PaeTec Communications and CampusLinks acquired from a Winnick investor group, Citizens Communications, Century Communications, Centennial Communications, IPC Information Systems acquired by Goldman Sachs in December 2001 and Adelphia Communications and Adelphia Cable.

Interested parties can view the FCC website at http://www.fcc.gov/transaction/globalcrossing-gx.html regarding comments filed by all parties including GlobalAxxess, a subsidiary of COMMAXXESS; dates of October 21, 2002, December 3, 2002, May 9, 2003, May 26, 2003, May 30, 2003 and June 4, 2003 in advance of this announcement.

The only conditions of financing are to address what contracts to accept, reject or modify, and as a U.S. owned company regulatory approval for transfer of control should not be a major obstacle or delay to closing.

Contact Person:    Karl W. B. Schwarz
Chairman, Chief Executive Officer
(501) 663-4959