HK PCCW Says No Plan For Rights Issue After Scrapped Bond
Updated: Tuesday, July 24, 2001 07:47 AM ET
HONG KONG (Dow Jones)--Pacific Century CyberWorks Ltd. (PCW, news, msgs) has no plans to attempt a rights issue or any other equity financing at this stage, an executive director said Tuesday.
The company decided to cancel its planned 10-year bond issue late last week.
According to a company spokeswoman, Executive Director Fred Ma told another wire service that there are many ways PCCW could repay or refinance its existing debt to achieve more financial flexibility. However, the company has no plans for equity financing, particularly a rights issue, Ma said.
Ma's comments followed a vague report in a Chinese-language paper that quoted unnamed market source as saying PCCW might conduct a "large-scale" rights issue if a second attempt for a debt issue fails.
The report had virtually no impact on the share price Tuesday as traders said a rights issue would be far-fetched amid the negative sentiment for the company, especially with the share price trading close to its all-time low.
And while the decision to scrap the bond issue appeared to have worsened sentiment about the company, analysts were generally positive about the move, saying that the terms were unfavorable and the company has no urgent financing needs.
According to the spokeswoman, Ma said that with the first repayment of its US$4.7 billion three-tranche syndicated loan about three years away, PCCW is in a comfortable financial position with strong cash flows.
PCCW was aiming to issue US$2.5 billion of 10-year bonds. But as investors demanded ever wider spreads versus the benchmark U.S. Treasurys and the possible size of the issue continued to shrink, the company decided to call the deal off.
PCCW said Friday in a statement that "present volatile bond market conditions arising from Argentina and other uncertainties in the emerging markets have resulted in potential pricing that the company finds unattractive at this time in comparison with its existing financing."
PCCW's shares closed down 2.5 HK cents at HK$2 Tuesday after hitting an intraday low of HK$1.98.
-By Anette Jonsson, Dow Jones Newswires; 852-2802-7002; anette.jonsson@dowjones.com
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