Milligan-Whyte & Smith

Receives

ASIAN M&A DEAL  of  THE YEAR AWARD, 2002

Asia Netcom / Asia Global Crossing

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February 2003/A Euromoney Publication

INTERNATIONAL FINANCIAL LAW REVIEW

What’s so special about it?

First cross-border acquisition of a telecom business by a Chinese state-owned company.

The agreement by China Netcom, a state-owned enterprise, to lead the acquisition of Asia Global Crossing’s assets, an undersea cable company that filed in the United States for Chapter 11 bankruptcy for the purpose of the deal, is the latest example of Chinese companies becoming global players.

It is the first cross-border acquisition of a telecom business by a Chinese state-owned company.

Under the terms of the deal, Asia Netcom, the new company formed by China Netcom with the backing of Newbridge Capital Group and the Softbank Asia Infrastructure Fund, will paid $270 million in equity and debt for the distressed assets of Asia Global Crossing, which is majority-owned by bankrupt US telecom company Global Crossing.

The book value of the acquired assets is around US$1.2 billion. The significant hard asset being acquired is an 18,740 km sub-sea cable linking Hong Kong, Japan, Taiwan, South Korea, Singapore and the Philippines.

The benefit of a Chapter 11 acquisition of assets - which is conducted under Section 363 of the US Bankruptcy Code is that a pre-agreed share and asset purchase agreement is subject only to court approval. This provides a controlled and protected environment for the acquirer.

The share and asset purchase agreement was executed on November 17, 2002.             

The documents are governed by US law, despite the assets being located throughout Asia and in Bermuda.

Law Firms Sharing Award:

*Milligan-Whyte & Smith                          Asia Global Crossing

*Gibson Dunn & Crutcher                         Asia Global Crossing

*Shearman & Sterling                              Asia Netcom

*Slaughter and May                                Asia Global Crossing

*Conyers Dill & Pearman                           Asia Netcom

*Kasowitz Benson Torres & Friedman          Asia Global Crossing

Milligan-Whyte & Smith

Receives

 ASIAN M&A DEAL  OF  THE YEAR 2002 AWARD

Law firm, Milligan-Whyte & Smith, has jointly received the prestigious Asian Mergers & Acquisitions Deal Of The Year Award 2002 from the International Financial Law Review for its role in the purchase of Bermuda Company, Asia Global Crossing Ltd. by Asia Netcom. Other firms sharing the award are Gibson, Dunn & Crutcher, Slaughter and May, Kasowitz, Benson Torres & Friedman, who act for Asia Global Crossing, as well as Shearman & Sterling and Conyers Dill & Pearman who act for Asia Netcom.

In making the award, the judges do not focus merely on the size of the deal, preferring to look at whether any special legal innovation was involved, or groundbreaking achievements made in a difficult regulatory environment or during adverse market conditions. In this case, the deal is the first cross-border acquisition of a telecom business by a Chinese State owned company, Asia Netcom, formed by China Netcom. To add to the complexity of the deal, Asia Global Crossing is currently in Chapter 11 in New York and in Provisional Liquidation in Bermuda, which provides a controlled and protected environment for the sale. Under the terms of the deal, Asia Netcom paid US$ 270 million in equity and debt for the distressed assets with a book value of US$ 1.2 billion, including an 18,740 km sub-sea cable linking Hong Kong, Japan, Taiwan, South Korea, Singapore and the Philippines.

The corporate, finance, insolvency and litigation team at Milligan-Whyte & Smith advising Asia Global Crossing comprised Partners Orlando Smith and John Milligan-Whyte, Timothy Fellowes QC, Litigation Department Head, John Elder QC, a long standing Corporate Finance Consultant to the firm, and Associate Lesley Basden.

Orlando Smith, Head of Corporate, commented  “We are gratified to have received this award as we focus on corporate and insolvency work and more recently on the Asian market.  We have been recruiting Mandarin and Cantonese speaking staff in response to the growth in our business from Asia and to better serve our existing Asian clients.”

John Milligan-Whyte, Insolvency Head, added, “Bermuda has tremendous recognized and unrecognized value adding features for corporate reorganizations, finance and venture capital transactions. We believe that Bermuda law firms receiving this type of award helps highlight those advantages and the caliber of legal expertise available in Bermuda.”

Dai Min, Director of Business Development, commented, “This deal is an example of the tremendous potential for Bermuda companies to participate in the globalization of the Chinese and other Asian economies, as Bermuda already does for American and European multinationals.”

AWARDS CRITERIA

This is not a quantitative survey of Asian transaction. Instead it is an opportunity to reward innovation, quality, diversity, difficulty and commitment to the development of legal services in Asia. Attention at all times is given to deals that are groundbreaking in their markets and in the region.

This survey was based on the deals nominated by law firms and is not exhaustive. It excludes deals  where the clients have requested confidentiality.

In selecting the winners of all wards, the IFLR editorial committee sought feedback from all industry participants, including lawyers and non-lawyers at many of the leading investment banks around the region. In choosing the six Law Firms of the Year, the committee considered the profile, number of clients and innovation.

The Regional Law Firms of the Year is also given on these criteria and recognized the best Asian Law firms in all categories in its home market. The Major Hagen & Africa International law Firm of the Year is the one that has the most widespread and wide-ranging Asian Practice, and that has shown its ability to complete on the most complex deals.

Thanks to all those who contributed to the research and helped with the nominations. And thanks to those of you that have supported the event with your presence at the The  Ritz Carlton.

Andrew Crooke, Asia editor, IFLR

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Milligan-Whyte & Smith

 Barristers & Attorneys

8 Par-la-ville rOAD, Mintflower  Place, 2^nd FlOOr.,

 Hamilton, hm 08 Bermuda

Tel.:       +1(441) 295-4294      

Fax:        +1(441) 295-1348

E-mail:     jmw@mws.bm    

 Website:      www.milliganwhytesmith.com

BACKGROUND:

Milligan-Whyte & Smith is a full service International law firm established in 1984 based in Hamilton, Bermuda.

The Firm provides legal solutions to the evolving International business sector in Bermuda. 

The Firm has played innovative roles in Insolvency and Reinsurance, Securities and Telecommunications in

Bermuda. The Firm focuses on adding value and helping clients respond successfully to both the routine and new Challenges.

AFFILIATED LAW FIRMS:    

Siway-Sanway, Shanghai, China  

LANGUAGES SPOKEN:       

English; Chinese (Mandarin, Cantonese)

CONTACT PERSONS: 

Orlando Smith; oasmith@mws.bm

John Milligan-Whyte; jmw@mws.bm

Dai Min;  daimin@att.net

PRACTICE AREAS:

- Banking and International Finance

- Reinsurance and Insurance

- Insolvency                       

- Corporate Finance

- Commercial

- Incorporations

- Corporate Services  

- Foreign Investment Law   

- Foreign Sales Corporations  

- Litigation & Arbitration     

- Mutual Funds & Investment Companies 

- Information Technology & Intellectual Property

-  Shipping & Aviation Law                               

- Trusts & Estate Planning  

- Telecommunication 

- Property Law