S.Korea's Dacom signs j/v MOU with Chinadotcom-CEO
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SEOUL, Oct 5 (Reuters) - South Korea's second largest
telephone company, Dacom (KOREA:15940), has signed a memorandum of
understanding with Chinadotcom (NASDAQ:CHINA) for an e-commerce
joint venture, Dacom's president said on Thursday.
"We have signed a memorandum of understanding with
Chinadotcom to launch a joint venture in the e-commerce
business," Chung Kyu-suk, president and CEO of Dacom, told
Reuters. "We plan to connect each other's portals for the
project."
He said Dacom, one of Korea's biggest Internet Service
providers, was in talks with the Hong Kong-based Asian Internet
firm for a final agreement.
Dacom shares were up 600 won to 64,000 at 0415 GMT.
Dacom, which offers Internet access services as well as
long-distance and international calls, has said it would
actively seek alliances with Korean and foreign companies to
focus on Internet and data communications businesses.
Chung said the company has postponed its planned listing on
the U.S. Nasdaq market to early 2001 from end-2000 due to
unfavourable market conditions.
"The downturn in the U.S. and Korean stock markets forced
us to delay the Nasdaq listing to next spring," he said.
The Korea Composite Stock Price Index <.KS11> has so far
declined more than 40 percent this year largely because of
heavy share offerings and drops in technology stocks.
Dacom shares have shed 87 percent this year.
Chung said Dacom shares, hit in line with other Internet
stocks, were undervalued considering its strong fundamentals
and solid revenue sources, including Boranet, a private-line
corporate Internet service.
He said the company would reduce its 2000 capital
investment plans to 605 billion won ($540.6 million) from an
originally planned 750 billion won.
"The growth in the local business-to-business Internet
market appears to be slower than we expected," Chung said.
The company plans to cut its 2001 investment by 30 percent
from this year, he said.
(US$ = 1,119.0 Won)
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