ILink Cuts Size of Share Offer Amid Technology Stock Weakness
By Cathy Chan
Hong Kong, Feb. 15 (Bloomberg) -- ILink.net Holdings Ltd., a data services venture that is 41 percent-controlled by Pacific Century CyberWorks Ltd., cut the size of its initial share sale by about a fifth amid diminished investor enthusiasm for technology- related stocks.
The Hong Kong-based data center expects to raise up to $18 million from the sale, down from the $23 million Chief Executive Billy Tam estimated in December.
``The market atmosphere last year was crazy,'' Tam said. ``We're back to a more rational market.''
ILink plans to issue 110 million new shares, representing about 15 percent of the company, to institutional investors at between HK$1.10 and HK$1.28, according to bankers involved in the share sale. The top price values the company at about HK$938.7 million.
CyberWorks announced plans to sell off the unit last October. The technology-oriented Growth Enterprise Market, where the shares are to trade, has dropped 13 percent since mid-October.
That could it make it tough to sell the issue.
``It's slightly more expensive than market expectations,'' said Joseph Ho, Asian Internet analyst at Dresdner RCM Global Investors Asia Ltd. ``The company needs to show there is high take- up rate at existing (data) centers and continuous strong demand for services.''
ILink said it would use the funds to establish four data centers in the Chinese cities of Shenzhen and Guangzhou, and in Singapore and Taiwan. Its expansion in China may be challenged by rival Sunevision Holdings Ltd., which also plans to spend HK$400 million on new data centers in China and Japan this year.
Oversupply of data services in Hong Kong may concern potential investors, Ho said.
Sunevision, backed by property giant Sun Hung Kai Properties Ltd., has about 500,000 square feet of space in Hong Kong. Henderson Cyber Ltd., the Internet arm of Henderson Land Development Co., is expected to complete more than 200,000 square feet of Internet service floor area this year, Ho said.
ILink will start presentations to institutional investors at the end of the month. The final price of the shares will be fixed on Feb. 28, and trading is expected to begin March 9, bankers said.
BNP Paribas Peregrine Securities Ltd. and e2-Capital Securities Holdings Ltd. are managing the offer. CU Securities Ltd. will also help underwrite the offer.
CyberWorks, Richard Li's Internet and telecommunication venture, reduced its stake in iLink to 41 percent from 80 percent July last year. Dell Computer Corp. holds 6 percent of iLink, and Henderson Investment Ltd. owns 11.5 percent.
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