COLO.COM Resolution Near
Acquirer with ties to Global Switch awaits court approval

July 22, 2001 -- The COLO.COM saga is nearing an end, as a proposed bulk sale of the colocation provider's data centers awaits approval by a federal bankruptcy court.
The pending deal, in which COLO.COM's 21 remaining data centers would be acquired by BJK Investments, a company with ties to Global Switch, will be reviewed in an Aug. 2 hearing in San Francisco before U.S. Bankruptcy Court Judge Thomas Carlson.
If the acquisition is approved, the parties hope to complete the sale by Aug. 10.
A source familiar with the negotiations said BJK involves "some investors ... that have historically been involved in Global Switch."
Not included in the deal is COLO.COM's San Ramon facility, which was sold to a group of private investors last month. The 21 remaining data centers include about 650,000 square feet of space.
No immediate impact is expected for COLO.COM's 170 customers, which currently generate monthly recurring revenues of approximately $2.2 million. Details of the acquirer's plans are expected to be announced once the deal is approved.
That revenue was not enough to support COLO.COM's $360 million debt load, and on May 8 the Brisbane, Calif.-based company filed for Chapter 11 bankruptcy, promising "business as usual" as it reorganized its finances. But the company was unable to obtain post-bankruptcy debtor-in-possesion financing, and on June 19, said it was putting its assets up for sale.
With the approval of the creditors' committee, COLO.COM hired the workout firm Development Specialists, Inc. to manage and negotiate the sale, with a deadline of July 9 to submit bids.
London-based Global Switch operates a portfolio of 12 carrier hotels worldwide, with 3.7 million square feet of space. It was founded by entrepreneurial brothers Andy and Gabriel Ruhan, along with attorney Simon Cooper. Its major investors include North American real estate firm TrizecHahn Corporation, and British firms Chelsfield Plc and Unicorn Assets Ltd
In May, Global Switch announced a complex transaction in which Italy's Risanamento Napoli S.p.A would acquire its assets. In exchange, Global Switch's three major investors would receive a controlling interest in Risanamento.