Softbank-led group to buy half of Korea Thrunet
By Bloomberg, Singapore.CNET.com
Thursday, December 14 2000
SEOUL--A group led by Softbank Corp, Asia's largest investor in Internet-related companies, will pay US$250 million for about half of Korea Thrunet Co, buying into the world's fastest growing high-speed Internet market.
The group will buy new shares issued by Thrunet, Korea's third-largest high-speed Internet service provider, and the company's management will remain in place with the Softbank group providing some new board members, said Edwin Baik, head of Thrunet's international finance team.
Thrunet asked Softbank Ventures Korea to try organize an investment about a month ago when it encountered "cash-flow problems," said Greg Moon, a vice president of the Seoul-based Softbank unit. The proposal was sent to Tokyo, where Softbank founder Masayoshi Son agreed to invest based on his interest in high-speed Internet, Moon said.
Thrunet, the first Korean company to make its initial public offering in the US, may need funds to continue investing in its network as it tries to compete against Korea Telecom Corp and Hanaro Telecom Inc.
Moon said most of the investment will come from Softbank with local partners such as Naray Mobile Telecom Co providing some funds.
Korea now has more than 3 million high-speed Internet users, more then the rest of Asia combined and second only in the world behind the United States.
Thrunet's shares have plummeted this year as investors expressed impatience with what they saw as the slow pace at which Internet companies have converted subscriber numbers into profits. Thrunet has never made a profit.
Its shares have lost 94 percent this year, cutting its market value to US$269 million from US$3.8 billion at the end of last year.
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