HK PCCW May Sell-Down Cyberport To Raise Cash-UBS Warburg
Updated: Tuesday, April 3, 2001 10:12 PM ET
HONG KONG (Dow Jones)--Hong Kong's Pacific Century CyberWorks Ltd. (H.PCW, news, msgs) may sell-down its stake in one of its non-core assets, including the Cyberport, in a bid to raise cash and lower its capital expenditure, according to a report by UBS Warburg.
The report said PCCW could reduce its stake in its Cyberport, its REACH Internet backbone joint venture with Australia's Telstra (TLS, news, msgs), Singapore's MobileOne, or its remaining cellular phone division.
The report by Dylan Tinker, regional telecom analyst at UBS Warburg said, "we wouldn't be surprised if management lowers its non-core capex levels to improve cash flows."
Any sell-down of its stake in the Cyberport - Hong Kong's attempt to create a technology hub - would imply a lower capital expenditure level for that division, Tinker said.
Last week, the embattled PCCW said in its results announcement that the company expects its Cyberport project to generate revenue by the last quarter of 2002.
The Hong Kong government is providing the land for the Cyberport project free of charge, while PCCW is paying construction, which amounts to some HK$15.8 billion.
PCCW is suffering from heavy debt, a net loss for 2000 of HK$6.1 billion, an aggressive Internet strategy that burst together with the technology asset bubble and ambivalence in the investment community over management's vision and ability to pursue goals.
It's share price is down more 90% from its record high of HK$28.577 Feb. 15, 2000 and at 0210 GMT (10:10 p.m. EDT Tuesday) was down 4.59% at HK$2.60.
-Dow Jones Newswires; 852-2802-7002; djnews.hongkong@dowjones.com
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