Mike, All... As previously reported by Northforce, BCI buying stake in Hansol (Korea). AIG taking a large piece too. Should give Hansol quite a bit of capital to buy infrastructure and subsidize handsets.-JLF
Bell Canada International buys stakes in Korean carrier
Hansol
By Lisa Larson
Bell Canada International Inc. and New York-based insurance and financial services firm American
International Group Inc. agreed to invest a combined $265 million to purchase a 39.4-percent
interest in South Korean personal communications services operator Hansol PCS Co. Ltd.
The agreement calls for BCI to acquire 23.6 percent for $159 million, and AIG to invest $106
million for a 15.8-percent stake in Hansol. AIG has partnered with BCI on a several other ventures,
including Yantai Bell and Shandong Bell in China, and Tata Communications in India.
``Our government welcomes BCI and AIG's investment in Hansol PCS,'' said Korea's Minister of
Information and Communications Bae Soon-hoon. ``This investment also is the first major foreign
investment in Korea's telecommunications industry, and we hope it will encourage future foreign
investments in Korea.
Hansol was awarded its PCS license in June 1996 and launched services in October 1997. Today
the company has more than 900,000 subscribers, said BCI. The company was founded in 1965 as
a paper manufacturing member of the Samsung Business Group. Hansol separated from Samsung in
1991.
Hansol PCS, one of three operators in South Korea, was formed in March 1996. It is a consortium
owned about 57 percent by a group of 240 small and medium-sized businesses. Hansol Group
owns approximately 27 percent, Dacom has a 6-percent stake, and the remaining 10 percent is
owned by three other groups, holding approximately 3 percent each.
Terms of the agreement call for BCI initially to acquire a 9.75-percent interest through common
stock, and to increase its stake to 18.2 percent through the purchase of convertible preferred shares
in October. In January 1999, BCI will acquire the rest of its interest in the form of convertible
bonds.
BCI said it will place several key executives at Hansol, including the deputy chief executive officer
and chief financial officer, who will play an active role in operating the company.
``Our investment in Hansol is a key component of our diversification strategy-almost doubling the
size of BCI in terms of subscribers-and presents a tremendous opportunity to increase the value of
our company,'' said Derek Burney, chairman and CEO of BCI.
``We believe that the Korean economy remains fundamentally strong, the wireless market holds
great potential, and Hansol has proven itself a successful marketer,'' Burney added.
Hansol President Chung Yong-moon said BCI and AIG's "investment of capital, people and
expertise will strengthen the competitiveness of the company, revitalizing our financial network and
the quality of our services, and improving our overall operations.'' |
