CyberWorks up as Li remains confident
BEN KWOK
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Pacific Century CyberWorks' share price rebounded nearly 10 per cent yesterday after chairman Richard Li Tzar-kai promised to facilitate the sale of stock held by Britain-based Cable & Wireless (C&W).
The counter had declined for six straight sessions, partly on rumours CyberWorks had been arranging a share-swap with C&W.
"We heard market rumours that there is some kind of share swap going on with CyberWorks," Vincent Koo, chief investment officer of Polaris Asset Management, said. "That pretty much explained recent volatility."
According to various sources who have contacted CyberWorks management recently, a sell-out of C&W's 14.9 per cent stake in CyberWorks could come before mid-February.
CyberWorks would end up with a new strategic shareholder willing to swap some assets in exchange for C&W's CyberWorks shares.
Investment banks close to CyberWorks suggested that C&W would be interested in expanding its core carrier business, such as Internet protocol backbone, in exchange for its Asian investments business. This transaction could come in either an assets or shares swap with an international telecoms company.
They added that under the present telecoms environment, there was not likely to be a buyer to take up the CyberWorks shares in cash.
Spokesmen for CyberWorks were not available for comment.
Mr Li, interviewed yesterday while having lunch with his father Li Ka-shing, said the company would announce the method of placement in due course.
"The share sale [by C&W] will be planned in such a way that we will communicate and co-operate with each other," he said.
In September, C&W raised HK$10.3 billion by cashing in a 4.9 per cent stake in CyberWorks, after the unexpected sale by Mr Li and his senior directors, which raised more than HK$4 billion.
Analysts believe C&W, which sold CyberWorks shares at HK$9.88 per share, was determined to cash out its remaining stake in CyberWorks as soon as possible.
But the fall in global telecoms and Internet valuations had dimmed its hopes.
Worries about the pending share placement pushed CyberWorks' share price to less than HK$4 on Wednesday, or off more than 20 per cent since the start of the year.
With the help of a 2.4 per cent rebound which pushed the Nasdaq to a one-month high yesterday, CyberWorks managed to buck its losing trend and closed at HK$4.25.
The counter rose 9.7 per cent, or HK$0.375, on a turnover of HK$5.05 billion.
Asked how the market would be able to absorb the placement, Mr Li said he was confident it would be in an orderly manner. "We will still get support from a lot of funds which are familiar with our business," Mr Li said.
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