PCCW predicts 6% growth for Telstra venture
By Simon Marshall, Total Telecom
07 December 2000
The combined strengths of Pacific Century CyberWorks' (PCCW), and to a lesser extent Telstra's balance sheets will become apparent as the joint IP backbone venture between the two begins posturing to obtain US$2 billion to fund growth.
According to an internal document leaked to Bloomberg News from PCCW, the Asian media giant is forecasting to banks that sales will grow 6% next year to US$1.9 billion, rising to US$4.5 billion by 2007, the Hong Kong iMail reported Thursday.
But PCCW faces doubt about whether its young venture can actually grow in line with the predictions.
"We don't know how rosy this business will be, given the slow-down of the U.S. economy," Winson Fong, director of Singapore-based SGY Asset Management told the iMail, "[the] business is new to everyone, including creditors," he added.
Speaking from the Telecom Asia 2000 show, Telstra's chief executive officer Dr Ziggy Switkowski already acknowledged Telstra is hampered by its Australian government majority ownership, which means it cannot raise capital by diluting government-owned shares.
Barclays Capital Asia and Chase Manhattan were hired to secure the syndicated loan.
Separately, PCCW said Wednesday it had promoted William Cheung, previously chief operating officer for its B2C (Asia) unit, to the same position for the entire organization.
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