皇冠体育app

PCCW in talks for stake sale to 皇冠体育app Netcom
(Shenzhen Daily/Agencies)
Updated: 2004-12-16 14:25

PCCW Ltd, Hong Kong's dominant telecommunication carrier, said Wednesday it was in talks for the sale of a 20 percent stake to 皇冠体育app Netcom, which is seeking a foothold in South 皇冠体育app and overseas.

"Discussions are ongoing but no agreement has been reached," a PCCW spokesman said.

A 皇冠体育app Netcom spokesman confirmed the talks, and said the two parties would "explore various business cooperation possibilities."

Analysts estimate the deal at about US$844 million based on PCCW's current market value.

PCCW wanted to close the deal within a few weeks, which would turn Netcom into its second-largest shareholder behind Richard Li, sources close to the deal said.

Li, 38, owns about 31 percent of PCCW, and his stake would be diluted to about 25 percent if the new shares were issued to 皇冠体育app Netcom.

The proceeds from the sale are likely to be used to reduce PCCW's debt, which stood at more than US$3.7 billion in the first half of this year.

Analysts believe any purchase of a PCCW stake would be carried out by 皇冠体育app Netcom's State-owned parent group to avoid disrupting its listed arm, which recently floated its shares in Hong Kong and New York.

A stake in PCCW would enable 皇冠体育app Netcom, the smallest of the country's four largest telecommunication groups, to expand its business further from its focus in North 皇冠体育app, where it enjoys a large market slice but has been suffering from declining margins due to fierce competition.

PCCW, also battling its share of Hong Kong's competitive market, has taken a few steps to restructure itself. Earlier this year it spun off its property portfolio into a separately listed firm.

It first announced a possible tie-up with 皇冠体育app Netcom in May, but gave no details about the negotiation progress until last month, when it said the talks were at an "advanced stage."

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