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Technology Stocks : PCW - Pacific Century CyberWorks Limited
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To: ms.smartest.person who wrote (963)4/3/2001 11:51:42 PM
From: ms.smartest.person  Read Replies (1) of 2248
 
C&W move to issue exchangeable bonds neutral for PCCW share price: analyst
2001-04-04


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Cable & Wireless PLC's decision to issue zero coupon
bonds exchangeable for Pacific Century CyberWorks Ltd stock will be neutral for
PCCW's share price, an analyst with a foreign research house said.
Other than removing the long-standing overhang on PCCW stock, the move
indicates that C&W is desperate to get rid of its 14.7 pct stake in the
company.
The analyst however was sceptical about whether there will be any takers
for the bonds, given the initial lack of buyers for C&W's direct stake in PCCW.
"I am not too sure who will subscribe to the bonds. If they couldn't find
buyers before, can they find buyers for the bonds now?"
He said C&W has been trying to get rid of its PCCW shares for quite a while
now and a bond issue seems the best option at the moment.
"They are just re-packaging the shares into a derivative option. That is
all.
"I would say it is neutral. I wouldn't say it is negative although we tend
to look at it as negative as we were expecting strategic investors to take up
the stake."
While the move will remove the overhang on PCCW shares, "all the bad news
on the company, ranging from its future outlook, lack of growth potential and
negative assets" will continue to weigh on sentiment, the analyst added.
ra/jw
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