Telstra, PCCW to base ventures in Bermuda
Friday December 8, 9:59 PM EST
MELBOURNE, Dec 9 (Reuters) - Australian telecoms giant Telstra Corp Ltd said on Saturday it would register its joint ventures with Hong Kong's Pacific Century CyberWorks (0008) in Bermuda.
"Bermuda has been chosen for a number of reasons. Firstly it has an internationally recognised legal system. It has a stable regulatory environment for holding companies," a Telstra spokesman said.
"It has a jurisdiction that facilitates debt and equity raisings because it is tax neutral," he said.
Telstra and PCCW sealed a pan-Asian alliance in October, creating an Internet Protocol network company, a regional wireless group and an international data centre company, with plans to float a piece of all of them.
National newspaper, The Australian, reported on Saturday that the groups plan to raise US$1.51 billion through stock market listings of a maximum of 10 percent of each of the ventures within 12 months.
The newspaper, citing a shareholders agreement between PCCW and Telstra, said the network group was valued at US$10 billion and was expected to raise US$1 billion. The wireless group, valued at US$3.1 billion, was likely to raise US$310 million.
The float proceeds from the data centres were forecast at US$200 million and the group was valued at US$2 billion.
Telstra declined to comment on the valuations.
"That would obviously be for the market to decide if and when it went to IPO," the Telstra spokesman said.
Share in Telstra fell two percent on Friday while PCCW gained 8.3 percent.
The Australian also said the shareholder agreement which it viewed, outlined plans to take at least 30 percent in targeted mobile companies, as it was a stake sufficient to exercise some influence.
The alliance with PCCW offers the 50.1 percent government-owned Telstra improved growth potential as the former monopoly is facing strong competition in its domestic market.
For PCCW the deal brings much needed cash as its acquisition of Cable & Wireless HKT earlier this year left it mired in debt. ((Simone Deane, Melbourne newsroom 61 3 9286-1435,
fax 61 3 9621 2994, melbourne.newsroom@reuters.com))
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