[00-5-02] SingTel Set For Big Share Of Point Asia
By Usanee Mongkolporn, The Nation.
BANGKOK, THAILAND,
02 May 2000, 9:19 PM CST
SingTel Set For Big Share Of Point Asia 05/02/00 BANGKOK, THAILAND, 2000 MAY 2 (NB) -- By Usanee Mongkolporn, The Nation. Singapore Telecommunications Ltd (SingTel), one of the region's largest telecom carriers, has made its first Thailand Internet investment by acquiring a substantial share of Loxley's Point Asia Dot Com.
The deal is believed to be worth about 1 billion baht (US$26 million) and could catapult Point Asia into the regional Internet service market and e-commerce arena.
SingTel will sign a contract for the share acquisition today, as well as announcing details of its investment.
The deal is believed to be worth more than 1 billion baht ($26 million) and possibly involves the acquisition of more than a 30 percent stake in Point Asia.
Point Asia is an Internet holding company of Loxley, the parent company of leading Thai Internet service provider (ISP), Loxley Information Service. Point Asia has recently repositioned itself as a regional Internet firm, after initially focusing solely on local consumers.
"SingTel would be our largest foreign strategic partner, causing a share dilution of existing partners," a source said.
Business Information Technology (LoxBit), another Loxley subsidiary, is a major shareholder in Point Asia with 70 percent, while Zesiger Capital Group (ZCG), a New York-based venture fund, owns 20 percent.
CitiCapital, an investment arm of CitiBank, owns the remaining 10 percent.
CitiCapital last month spent $10 million on its shares, as part of its strategy to penetrate the Asian e-commerce market.
SingTel negotiated with several local ISPs and Internet companies for a similar deal before settling on Point Asia, the source said.
SingTel is also a 20 percent strategic partner of Advance Info Service (AIS), Thailand's largest mobile phone operator, owned by Shin Corporations.
A partnership with SingTel will also help Point Asia list on the Nasdaq market, the source said.
The move to joint investment follows a merger and acquisition trend among local ISPs with foreign partners to foster their competitive edge - particularly in the wake of the arrival of powerful foreign ISPs.
An Asian telecom giant, Cable and Wireless Hong Kong Telecommunications, has already set foot in Thailand's ISP business.
SingTel had at one point planned to merge with Cable and Wireless HKT, but lost the bid after a bitter battle with start-up Internet company Pacific Century CyberWorks, of Hutchison Whampoa.
SingTel did however, succeed in hooking up with Lycos, a global portal home page network operator.
That alliance has lead to an attempt by Shin Corps to team up with Lycos to jointly develop a five-Asian-language portal site. But the deal is not yet complete.
With the entry of SingTel in Point Asia, there was a possibility Shin Corps would initiate the formation of an Internet business alliance with Loxley, the source said.
There is an indirect tie between the two companies.
Earlier this year Loxley Information partnered AD Venture, an Internet business venture fund of Shin Corps, to deliver a business-to-business trading hub in Thailand, together with two Singaporean companies.
Point Asia has already established a springboard to the regional market.
Last month it established a 50 million baht ($1.3 million) joint venture ISP with PT Metrodata Electronic, Indonesia's biggest personal computer vendor, to foray into Indonesia's market.
That move made Point Asia the first Thai company with an Internet investment in an overseas market.
Point Asia is aiming for a 20 percent share of Indonesia's market within the year.
In addition, it is discussing a new partnership with two leading United States Internet and computer companies related to its Indonesian joint venture to attempt to capture Indochina market share.
Exchange Rate: $1 = 38.43 baht
Reported By Newsbytes.com, newsbytes.com
21:19 CST
(20000502/WIRES ASIA, ONLINE, TELECOM, BUSINESS/)
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