CyberWorks-Telstra joint venture sticks with bid for MobileOne
BEN KWOK and AGENCE FRANCE-PRESSE
A regional mobile telecommunications joint venture between Australia's Telstra and Pacific Century CyberWorks will bid for all of Singapore operator MobileOne Asia (M1).
The planned acquisition, if successful, would probably see CyberWorks' stake in the joint venture - which includes the mobile assets of the former Hongkong Telecom - further diluted to below 40 per cent. In a surprise announcement on Wednesday, M1's three shareholders said they were in talks which might result in a joint disposal of their shares. Estimates of the price tag ranged from S$2 billion (about HK$8.59 billion) to S$3 billion.
Telstra confirmed the company remained interested in M1, through its 60 per cent-owned regional wireless venture, if the three founding shareholders wanted to cash out.
"It is our stated intention to go into Asia together," said Dick Simpson, chief executive of Telstra International.
CyberWorks already holds an effective 14.7 per cent in M1 through Great Eastern Telecommunications (GET), a joint venture with Cable & Wireless.
GET holds 30 per cent of M1, while Singapore Press Holdings and Keppel Telecommunications and Transportation each own 35 per cent.
CyberWorks' commitment to M1 was thrown into question after deputy chairman Francis Yuen Tin-fan told investors recently the company would dispose of non-core assets including M1 to raise US$1 billion in cash.
CyberWorks, which has net debt of about US$5 billion, is seen as lacking the funds for a regional expansion programme.
But CyberWorks yesterday said it had more than US$1 billion cash, strong internal cash flow, and could meet the requirements of its committed programmes and debt-servicing needs. Sources suggested CyberWorks could pledge its M1 stake to the Telstra joint venture without contributing its own capital.
By injecting more capital, Telstra would take a more dominant position in the joint venture, diluting CyberWorks' stake of 40 per cent.
CyberWorks gave up majority control of CSL, a former Hongkong Telecom arm and the SAR's second-largest mobile operator, in February after Telstra agreed to pay US$1.68 billion in exchange for a 60 per cent stake. CyberWorks had originally proposed selling a 40 per cent stake to Telstra last April.
Hubert Ng Ching-wah, chief executive of CSL and director of the regional mobile joint venture, said the company was still keen on M1, but whether they could acquire a 100 per cent interest "depends on prices and conditions".
Separately, CyberWorks yesterday said it had no plan to reduce its stake in the Cyberport project. The company also reiterated its commitment to its two joint ventures with Telstra following reports the Australian company might want to end their alliance. "There is a genuine enthusiasm on the part of all involved in our strategic alliance with Telstra," said Alex Arena, CyberWorks deputy chairman. "PCCW has no intention to reduce its proportionate stake in these ventures."
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