PCCW <1186.HK> clarifies booking unrealised gains
HONG KONG, March 20 (Reuters) - Pacific Century CyberWorks Ltd (PCCW) <1186.HK> said on Monday it would only book US$73.8 million gains from securities held for hedging transaction purposes under the "Other Investments" account in the 1999 results.
The Hong Kong-based Internet firm, due on Monday to announce its final results ended December 31 1999, clarified a press report it would not book unrealised gains from its venture capital investments as profit in its accounts.
The South China Morning Post on Friday said PCCW had booked an unrealised gain of US$1 billion on investment in about a dozen listed Internet-related companies, according to group managing director Alex Arena. PCCW has been featured on International headlines recently after winning a battle to merge with Cable & Wireless HKT <0008.HK> from Britain's Cable & Wireless Plc .
It has invested in over 40 companies, of which 14 such investments are in securities, including its holding in CMGI Inc , SoftNet System Inc , Golden Power International Holdings Ltd <0603.HK> and tom.com Ltd <8001.HK>.
The Internet company said the holdings in CMGI, SoftNet System, Golden Power and tom.com were held for long-term strategic purposes and were clarified as "Investment Securities" in its account.
It said the market value of the holdings in the four companies were at US$1.54 billion as at March 16, compared with US$522.3 million in initial acquisition cost. Of the remaining listed investments in the portfolio, their market value as at March 16 and acquisition cost amounted to US$29.8 million and US$12.6 million respectively.
Of the US$73.8 million in gains under "Other Investments" account being booked, US$4.8 million was realised, while US$69 million was unrealised.
Trading in PCCW shares would resume on Monday after being suspended on Friday morning.
PCCW shares closed on Thursday at HK$19.95, their lowest since the company agreed to a merger with C&W HKT on February 29. Separately, PCCW said talks between its chairman Richard Li and News Corp's Rupert Murdoch on the future of the Star TV-C&W HKT pay television joint venture had been held but no timetable had been determined within which such dialogue must take place or within which any conclusion must be reached.
The future of the C&W HKT-Star TV joint venture was thrown into doubt following Li's victory late last month in a takeover battle fo C&W HKT. Star TV is unit of News Corp. Murdoch, who backed rival bidder Singapore Telecommunications Ltd in the struggle for C&W HKT, was quoted in the Financial Times as saying Li had made "no secret he would screw us out of the partnership with HKT". But Li said early this month he had no animosity over Murdoch's backing of SingTel.
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