HK Cheung Wah In US$25M Shr Swap With Chinadotcom
Dow Jones Newswires
HONG KONG -- Cheung Wah Development Co. (H.CWD), the Hong Kong-listed investment arm of Japan's Softbank Corp. (J.SFT or 9984), Thursday announced a string of new investments including a US$25 million share swap with Chinadotcom Corp. (CHINA) and a US$50 million swap with Malaysia's Digi Swisscom Bhd. (P.DIG).
Softbank owns 61% of Cheung Wah through Softbank Investment (International) Holdings. Chueng Wah plans to soon change its name to Softbank Investment International (Strategic) Ltd.
In addition, Softbank Investment will swap shares worth US$50 million with Philweb.com Inc., a Philippine Internet concern. Together with an earlier-announced US$20 million share swap with Hong Kong's Lai Sun Hotels International Ltd. (H.LAH), the Softbank unit's total investments in the Asia Pacific excluding Japan will total US$145 million.
Softbank is making the string of share swaps to beef up its Internet portfolio as part of its transformation into a regional high-tech play, according to Junichi Goto, president and executive director of Softbank Investment.
Softbank Investment will issue approximately 5% of its enlarged issued capital to finance the swaps, said William Wu, director of corporate finance with e2-Capital Ltd., the corporate finance firm that put the deals together.
Softbank Investment and Pacific Century CyberWorks Ltd. (H.PCW) have each taken a 5.7% stake in the corporate finance company for US$10 million.
Goto, however, said Pacific Century CyberWorks is not involved in any of the transactions.
Goto also rules out the possibility of parent Softbank Corp. injecting some of its investments in Asia-Pacific into the unit.
Until now, Softbank Corp. has invested about US$40 million into about 20 Internet and technology-related projects in the mainland and Hong Kong, Goto told reporters.
In addition to the share swaps, Softbank Investment will form a 50-50 joint venture with Chinadotcom to provide consultancy services to the Internet start-ups invested by the two companies.
"(Through the joint venture), we'll introduce Internet companies in Japan into Asia. We'll also help subsidiaries of Chinadotcom set up businesses in Japan," Goto said.
Chinadotcom, through its subsidiary Web Connection, currently has a so-called "jump-start program" that provides start-up capital as well as management advice to Internet companies in the region.
Finally, Softbank Investment will also set up an investment company with Philweb.com and American International Group Inc. (AIG) to invest in Internet-related businesses in the Philippines.
"Philweb will hold 50% of the investment company, while Softbank Investment and AIG will each hold the remaining 25%," Goto said.
Softbank isn't only moving its business online through investments in Internet companies in the region. It will also acquire content locally, mainly through its new alliance with Lai Sun Hotels.
The Lai Sun Group of companies recently announced taking 50% of a Website, HKATV.com, from local television broadcaster Asia Television Ltd. for HK$300 million.
Softbank Investment said Lai Sun will become one of its future online content providers.
-By Kenneth Wong; 852 2832 2334; kenneth.wong@dowjones.com
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