Telecoms group Global Crossing said it has filed for Chapter 11 bankruptcy protection in the United States along with coordinated proceedings in Bermuda.
The ailing group said it had signed a letter of intent with Hutchison Whampoa Limited of Hong Kong and Singapore Technologies Telemedia for a $750 million cash investment for a joint majority stake in the firm, pending approval by the courts as part of a restructuring.
In a statement, the company said the filing is part of a restructuring process aimed at improving the Global Crossing's balance sheet position.
Chief executive officer Mr John Legere said: "Ours is a balance sheet issue, not an operational one, and today's actions are intended to directly address this issue.
"Even with the financial uncertainty we've recently experienced, customers have continued to choose our network over many others," he added.
Mr Legere insisted that company's operations will be unaffected by the filing and that employees will continue to receive their wages.
Under the terms of the proposed investment, which is conditional on, among other things, the confirmation of a plan of reorganization by the courts before the end of August, creditors would share in a combination of cash, new debt and new equity in the restructured company.
Global Crossing, known for building a worldwide fibre optic network, accumulated some eight billion dollars in debts.
AFP