CyberWorks eyes second generation NOW
Jonathan Tam
PACIFIC Century CyberWorks (PCCW) (0008) plans to boost current services by developing its Internet television Network of the World (NOW), according to company sources.
``We are working on the second generation NOW but I cannot comment on it because it is not officially announced,'' said PCCW spokeswoman Joan Wagner.
NOW is PCCW's TV broadcasting service through the Internet.
It planned to become a major regional player but was not very well received in Asia, mainly because it had only English language programmes. PCCW seemed to be scaling back NOW. Only last month, it said it would cut down investment.
The company's chairman, Richard Li Tzar-kai, told reporters on Sunday that CyberWorks would spend not more than US$200 million (HK$1.56 billion) each year on the entire business-to-customer businesses.
PCCW has spent about US$179 million since the development of NOW, said Ms Wagner.
Separately, debt newsletter Basis Point said the US$4.7 billion syndicated loan arranged for PCCW will put limitations on its capital expenditure.
It said under the terms of the loan, the firm's telecom arm, HKT was allowed to spend a maximum of HK$4.2 billion for the fiscal year 2001, HK$3.3 billion for 2002 and HK$2.9 billion thereafter.
GK Goh Securities estimated PCCW's total capital outlay at HK$6.9 billion this year, HK$9.1 billion next year and HK$8.6 billion in 2002, without revealing HKT's share. The terms also include a stipulation that PCCW must at all times hold at least 50 per cent of HKT and Richard Li must remain the single largest shareholder in PCCW, Basis Point said.
Not more than 75 per cent of profits could be distributed as dividends if total debt to earnings before interest, taxes, depreciation and amortisation (Ebitda), a common measure of cashflow, was more than or equal to 3.5 times. The ratio for HKT is 5 times.
The interest of the loan would rise by 5 basis points for the fiveyear tranche if the debt to Ebitda ratio was above 3 times after 2004. The seven-year tranche would rise by another 5 basis points if the ratio was more than 2.5 times from 2006.
The US$4.7 billion loan is divided into three tranche: the US$1.5 billion three-year tranche carries an interest rate of 50 basis points over the London interbank offered rate (Libor), the US$2.3 billion five-year tranche and the US$0.9 billion seven-year tranche carries a rate of 65 and 80 basis points over Libor respectively. HKT's debt to Ebitda must not exceed 5.5 times for 2001, five times for 2002 and 3.5 times for the remaining period, Basis Point said.
Pacific Century CyberWorks Japan announced that it had spent US$2.8 million to buy 51 per cent of mobile and Internet content production firm B-Factory yesterday.
It said the investment in BFactory would strengthen PCCW Japan's mobile business by providing entertainment content and production know-how for the firm's regional broadband mobile service including NOW.
5 December 2000 / 02:43 AM
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