China Netcom Corp yesterday completed the purchase of Asia Global Crossing (AGC), saving the pan-Asia undersea cable operator from bankruptcy and realising its ambition of expanding beyond the mainland market. 'Now we are best positioned to be the dominant pan-Asian operators in the next 18 to 24 months,' said Bill Barney, the former president of AGC and the president and chief operating officer of new entity Asia Netcom. Because the company's United States assets were stripped out, the AGC-Netcom deal did not need to go through the regulatory hurdles that have held up Hutchison Whampoa's plan to acquire AGC's parent Global Crossing. AGC was able to convince its creditors, who were owed US$408 million, to accept the deal because it left US$89.8 million for them to share, compared with the US$81.2 million first promised when the deal was announced last November. By injecting US$120 million equity and US$150 million bank loans into Asia Netcom, China Netcom and its private equity investment fund partners - Newbridge Capital and Softbank Asia Infrastructure Fund - aim at revitalising the struggling carrier. China Netcom, through its Hong Kong unit China Netcom Corp (Hong Kong), will take a majority stake, but details are yet to be finalised. 'This is a unique opportunity for us. We combine the largest and [most] powerful network in China into Asia Netcom, which enables us to offer a seamless network in by far the fastest-growing market in the world,' Mr Barney said. 'We are aiming to be ebitda (earnings before interest, tax, depreciation and amortisation) positive before 2005, well ahead of the 2007 target we set out in our former [initial public offering] prospectus.' Mr Barney said that with the backing of China Netcom's nationwide optical fibre network in China, Asia Netcom would be able to accelerate its plan to focus on providing voice and data services to corporate customers and shift away from providing wholesale bandwidth to other carriers. Of its US$115 million sales revenue generated last year, corporate clients contributed 65 to 68 per cent, with the remainder coming from wholesale business. Thanks to the strong growth in the corporate business, Mr Barney said AGC beat its sales target by about 40 per cent. Asia Netcom plans to reduce the contribution from wholesale business to 5 to 10 per cent by 2005. At the end of January, China Netcom's rival China Telecommunications Corporation failed in its plan to acquire a 51 per cent stake in a telecom licence in South Africa. Meanwhile, the official Business Post reported that the mainland's smallest telecom carrier China Railcom is suffering from a serious shortage of capital. Its management is split between whether to turn it into a national network or keep it mainly for the use of the rail network, according to the newspaper. China Railcom, owned by the Ministry of Railways, had budgeted 5.7 billion yuan (about HK$5.35 billion) for investment this year, down 42 per cent from last year.