Telecom firms holding out for foreign investment
Local telecom companies are preparing to make massive investments in IMT-2000 and high
speed Internet networks, but they are having a hard time getting through to foreign investors.
Korea Telecom (KT), Hanaro Telecom, Thrunet, SK Telecom and other companies have
been talking for months with potential foreign backers from investment institutions and
communication companies without any results, said an Industry source Friday.
Korea Telecom plans to bring in $6 billion in foreign investments by selling up to 15 percent of
its shares to foreign companies.
But the sale had to be delayed after the recent plunge on the stock market and competition for
IMT-2000 service licenses heated up.
"The company has lines to four or five foreign firms, but all of them are waiting to see if KT
wins an IMT-2000 service license. So we won't know the results until next year, "said Lee
Kye-chol, president of KT.
Stock and depository receipt prices are just as important as the IMT-2000 license. Unless the
market recovers, it will be difficult to meet the original goal, said a KT source.
Hanaro Telecom is planning to invest 2 trillion won ($1.68 billion) with 1 trillion won coming
from local investors and the other half from abroad.
The company hopes the deals will be completed sooner than expected.
"We are in the last stage of talks with investors from Asia, Europe and the United States
which should be completed early next month," said a source at Hanaro.
The source added the company will try to keep management in local hands.
Currently, none of the main shareholders have a controlling stake. LG Group holds 13.8
percent, Samsung Group 9 percent, Hyundai Group 7.6 percent, Sk group 7.1 percent,
Daewoo Securities 4.5 percent and Thrunet 4.8 percent.
In order to control the flow of its issues in the market, Hanaro is considering issuing
convertible bonds instead.
A broadband operator Thrunet is taking up vendor financing to deliver foreign funds as well as
bringing in foreign investors.
Vendor financing is a method often used by equipment suppliers. Equipment is leased with
the annual payments equal or less than the savings obtained by the user per year. (Yonhap)
Thrunet is negotiating with a personal computer manufacturer to obtain 30 billion to 40 billion
won in funds and with a foreign company to bring in $100 million in investments.
Sk Telecom is talking with foreign firms including NTT DoCoMo from Japan to sell around 10
percent of its stake to bring in 4 trillion to 6 trillion won in foreign investments.
But the company said it is in no hurry since its stock prices are low, getting an IMT-2000
license is uncertain and there is no immediate need for the funds. (Yonhap)
By Yook Jin-young
2000.11.27
koreaherald.co.kr |
