South China Morning Post
Internet Edition
Tuesday, March 14, 2000
TECHNOLOGY
Cheung Wah lines up key stakes
KAI PETER YU
Cheung Wah Development is expected to announce a number of tie-ups and investments in Hong Kong and Southeast Asian companies after it resumes trading.
The company, a subsidiary of Japan-based Softbank, was suspended from trading yesterday, pending announcements of an unspecified number of transactions.
Chueng Wah is to help transform Lai Sun Hotels into an Internet-content provider after the completion of a share-swap agreement, according to sources.
Chinese-language Web sites ATV.com and chinastar.com and print and media businesses would be injected into Lai Sun Hotels as part of the transaction that would give Cheung Wah a 10 per cent stake in the company, they said.
Lai Sun Hotels will be renamed eSun, and its hotel business would be ejected from the listed entity.
Cheung Wah also planned to acquire a 3 per cent stake in Digi Swisscom, Malaysia's third-largest mobile-telephone operator, among a number of other deals, the sources said.
Digi stock surged 29 per cent on the Kuala Lumpur Stock Exchange yesterday on rumours of the transaction.
Cheung Wah, to be renamed Softbank Investment International Strategic, is 61.1 controlled by Internet giant Softbank.
Yoshitaka Kitao, a vice-president at Softbank and chairman at Cheung Wah, said Softbank would use Cheung Wah's shares to do deals but would retain a controlling stake in the company.
"We'll be doing a lot of things on the equities side," he said. "But we want to keep at least 50 per cent [of Cheung Wah] for as long as possible."
Cheung Wah's core-business will be investing in and providing the backbone services to help businesses move on-line.
A "Net-trans" fund will be set up under Cheung Wah to invest in such businesses and Cheung Wah would take 20 to 30 per cent stakes in the companies.
Cheung Wah would sell to the companies packages including the Linux operating platform, firewalls and other software and value-added services provided by anti-virus software company Trend Micro, a fellow Softbank subsidiary.
Mr Kitao said the packages would be sold in the mainland through Cheung Wah's 30 distribution centres.
He also said Cheung Wah's logistics network on the mainland would be upgraded to provide fulfilment services for the investee companies.
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