GST's Hawaiian Assets at Center of Brewing Storm

GST announced May 17 that it would declare bankruptcy under Chapter 11 of the Bankruptcy Act, and that it had agreed to sell its assets to Time Warner Telecom for $450 million.

However, MBN Communications Inc. says it agreed April 27 to buy GST's Hawaiian operations for $76 million. The deal includes GST's CLEC and ISP operations in the state. The statement issued today is the first time MBN has acknowledged making that deal. GST has never acknowledged it publicly.

In a prepared statement, MBN says Time Warner's offer amounts to less than half the book value of GST's assets. Pointing out that GST is at nearly $1.2 billion in debt, the statement says: "If the creditors [of GST] accept the Time Warner offer and ignore the MBN offer, they may leave as much as $40 million on the table for the Hawaii assets alone." Translated, that means GST's Hawaiian assets will be undervalued by as much as $40 million.

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines