Business

Teleglobe sells voice and data business

Teleglobe announced Thursday it is selling its voice and data business for $155.3 million US in cash to a company controlled by affiliates of a pair of U.S. investment firms.

The buyers are Cerberus Capital Management, L.P. and TenX Capital Partners, LLC of New York and Philadelphia, respectively.

The new owners are expected to assume day-to-day operations of the business in mid-November following court approval. Final closing of the transaction is expected early next year.

"For employees and customers, the transition is expected to be smooth," John Brunette, Teleglobe's CEO, said in a release.

The headquarters and operation of Teleglobe will remain in Montreal, the companies said.

"This is an excellent long-term investment for our group. Teleglobe is consistent with the types of companies in which Cerberus likes to invest," Lenard Tessler, Cereberus's managing director.

Saddled with $4 billion in debt, Teleglobe cut 850 jobs almost half of its staff on May 15 as the company went into bankruptcy protection to give it time to restructure its operations under a new CEO.

Most of the cuts were related to Teleglobe's decision to get out of the Internet hosting business and some portions of its data transmission business.

On April 24, BCE Inc. cut off long-term funding to Teleglobe and said it would give up on the company and take a charge of up to $8.5 billion.