Li Ka-shing's PCCW deal
Staff reporter, Hong Kong iMail
PCCW bought a Hutchison subsidiary for $803 million yesterday. The deal means Li Ka-shing is now an indirect shareholder in Richard Li Tzar -kai's internet-telecoms company.
Picture: Happy Yuen, Hong Kong iMail
TYCOON Li Ka-shing last night indirectly became a shareholder in his son's troubled company Pacific Century CyberWorks.
In a deal which is expected to raise a number of questions from legislators, PCCW, run by Richard Li Tzar-kai acquired Hutchison Whampoa's satellite-based network solutions provider for US$103 million (HK$803.4 million) by issuing 184 million new shares.
The new shares were issued at $4.375 each (PCCW's closing price yesterday) and represent a 0.83 per cent stake in PCCW.
As one analyst pointed out late last night: ``I don't think this is going to sit very well with a number of people in Hong Kong. Although it is a very small stake, less than one per cent, it means Li Ka-shing has a toe-hold in his son's company.''
A spokesman for the Office of the Telecommunications Authority (Ofta) said the sale was authorised because the number of shares involved was quite small.
The analyst said: ``It must have been sanctioned by Ofta. I can't see it going ahead otherwise.
``Despite the relatively insignificant stake in PCCW, questions will be raised about conflict of interest.''
The acquisition of Hutchison Telecommunications Technology Investments group, including satellite communications company Hutchison Corporate Access (HCA), would bring to PCCW about 200 multinational customers in more than 40 countries, PCCW said in a statement.
PCCW said HCA was focusing on building in-country operations and was expected to complement the international services of Reach, the Internet Protocol backbone venture between PCCW and Telstra Corp.
HCA was founded in 1994 by Pacific Century Group, parent of PCCW, and sold to Hutchison in 1995 for $581.1 million.
One industry insider said: ``Pacific Century did very little with HCA but I gather Hutchison built it into quite a profitable little business.''
In its statement last night Hutchison said its telecommunications business was now focused on mobile technologies and not satellite. ``Over the last few years, Hutchison has disposed of its satellite businesses, including the group's equity interest in Asia Satellite.''
Hutchison group managing director, Canning Fok said: ``This completes our disposal programme of the group's satellite interests.''
24 February 2001 / 01:50 AM |
