Reach Acquires North Asian Loop from Level 3

Hong Kong, December 19, 2001 – Reach today announced Reach has signed an agreement to acquire the Asian assets of Level 3 Communication, including the North Asian Loop cable system (Tiger) and capacity on the Japan-US Cable System.

Under the terms of the transaction, Reach will take over Level 3’s Asian assets and operations including customers, in-country networks, data centres, US$90 million of working capital and Level 3’s ownership interests in the Tiger and Japan-US Cable System. In exchange, Reach will assume Level 3 Asia’s capital and operating cost obligations effective from 30 November, primarily US$170 million for the completion of the submarine cable systems. Reach is not taking on any of Level 3’s debt and the transaction will be internally funded.

The Tiger network assets that will be transferred include three fibre pairs in the North Asia Loop linking Japan, Korea, Taiwan and Hong Kong and its cable landing stations in Japan, Taiwan and Hong Kong. The eastern leg of the North Asia Loop submarine cable system was launched by Level 3 Communications in June 2001, while its western leg connecting Japan and Hong Kong via Korea is still under construction by FLAG Telecom. 

The lit capacity of the Tiger submarine cable system is 80 Gbit/s, which is upgradeable to a maximum of 1,350 Gbit/s. The transaction also includes approximately 40 Gbit/s of data capacity in the Japan- U.S. submarine cable system.