Updated from 9:21 a.m. EST
The recent selloff in
created a buying opportunity for Mexican tycoon Carlos Slim, an investment trust of whom now owns 9.1% of the undersea network's outstanding common stock.
Slim's Orient Star Holdings said in a
Securities and Exchange Commission
filing that it owns 2 million Global Crossing shares, having crossed the 5% threshold that requires notification on March 17 when the shares touched $12.25 each, but closed at $15.44.
The March 17 low was the cheapest Global Crossing has been since emerging from chapter 11 bankruptcy in December. The shares resumed trading in mid-January around $35 but have been steadily falling, and were routed March 10 when the company said competitive pressures would crimp current-year revenue.
and has stakes in telecommunications outfits throughout Latin America. His 2 million shares give him a roughly 5% stake in Global Crossing's total equity, which also includes preferred stock.
The shares were recently up 94 cents, or 6.8%, to $14.80 on the Instinet premarket session. The company said in a Monday morning statement that the investment "shows confidence in our future, as we pursue our goal of a leadership position in the telecommunications industry."
The filing comes as several former Global Crossing executives agreed to pay $325 million to settle lawsuits brought by investors and former employees over the company's collapse two years ago, lawyers for the plaintiff said late Friday.
Former Chairman Gary Winnick and some of the company's former lawyers agreed to pay $245 million to settle securities-fraud claims and $80 million to settle pension-fraud suits. Winnick will personally pay $50 million of the settlement.
Winnick and other Global Crossing executives were accused of misleading investors and workers by inflating revenues. The company became the poster child for imprudent spending after building a fiber-optic network that spanned the globe at a cost of billions of dollars. It emerged from bankruptcy in December 2003 after erasing $12 billion in debt along with $40 billion in shareholder equity.
The lead plaintiffs in the class-action suit were the Public Employees' Retirement System of Ohio and the State Teachers' Retirement System of Ohio.
"The settlement makes clear that corporate executives can and will be held personally accountable for squandering shareholder assets," said attorney Jay Eisenhofer, the lead attorney for the plaintiffs.
The settlement won preliminary approval from a New York federal judge on Friday and is expected to be final in about three months.