Hong Kong iLink Says Business Won't Conflict With PCCW Unit
February 28, 2001 7:33 AM
HONG KONG -(Dow Jones)- iLink.net said its business interests will not conflict with a subsidiary of its parent, Pacific Century CyberWorks (H.PCW), which runs the same business as iLink.
The data-center operator said Wednesday another PCCW subsidiary, Powerbase, would not have an overlapping clientele because iLink targets small and medium-sized enterprises in Hong Kong, while Powerbase targets multinational corporations and international telecom companies.
The Growth Enterprise Market listing candidate said it has reached an agreement with parent PCCW that it will use a bandwidth limit as a delineation to avoid a conflict of interest with Powerbase.
It said iLink will serve customers who require internet connectivity, server hosting services with a bandwidth of 384 kbps or below. For those requesting a bandwidth over that level, it has agreed to refer customers to Powerbase.
Powerbase also operates a 27,000 square-meter data center in Hong Kong, and two data centers in China. Concerns have been raised over a conflict of interest between the two subsidiaries, as Powerbase also operates data centers and provides internet connectivity, server hosting and co-location services.
Separately, Chief Executive Officer Billy Tam said the company will have market capitalization of HK$1.35 billion. Trading on Hong Kong secondary market will begin on March 9, with issue price set at HK$1.28 per share.
He told reporters Wednesday although the company could not give a prediction as to when the group can break even, the fact that it only took one year for the two data centers to achieve break-even status suggests it won't take long.
It ran a net loss of HK$28.6 million for the 10 months ended Oct. 31, 2000,
According to the placing prospectus, PCCW has to comply with the listing rule of not disposing the 47.9% stake in iLink.net in a six-month lock-up period starting from the first day of listing.
However, PCCW and Media Touch, which is an indirect wholly-owned subsidiary of PCCW, can choose to dispose iLink's shares provided that their combined interest in iLink's issued share capital does not fall below 35%.
Executive Director Sam Cheung said during the press conference that PCCW has committed itself not to dispose of any stake in iLink in a voluntary, six-month second lock-up period.
Cheung was a director of PCCW's investment arm, CyberVenture, before he joined iLink as executive director and chief financial officer.
-By Georgina Lee, Dow Jones Newswires; 852-2802-7002; georgina.lee@dowjones.com
(This story was originally published by Dow Jones Newswires)
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