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Technology Stocks : PCW - Pacific Century CyberWorks Limited -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (428)	2/25/2001 7:17:00 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Daddy Warbucks Helps Son's CyberWorks February 23, 2001 03:55:00 AM ET Li Ka-Shing's Hutchison Whampoa will take a $103 million stake in Richard Li's Hong Kong telco. By Joanne Lee-Young HONG KONG — Shares in the Hong Kong telco Pacific Century CyberWorks (PCW) rose 4 percent Friday after Hutchison Whampoa (HUWHY) said it would take a $103 million stake in the ailing communications company. Recently, Hutchison Whampoa's boss, Li Ka-Shing, had emphatically told reporters that his companies would not step in to rescue CyberWorks, which is run by his son Richard Li. However, Hutchison has now stepped in. Although Hutchison's investment represents a relatively small percentage of the company, it does inject the cachet of Li Ka-Shing's backing just as CyberWorks began to look decidedly lackluster. CyberWorks lost its appeal for investors when hyped plans for a grand Internet entertainment empire flopped and after it took over Hong Kong's dominant telephone company in one of Asia's biggest deals only to sell the best parts of the company to pay for it. While the younger Li's CyberWorks has gone from dazzling to shaky in less than a year, the elder Li has a long-established reputation for making smart, timely investments and returning shareholder value. Despite CyberWorks shares dropping 75 percent since it took over Hong Kong Telecom in August, a Hutchison spokeswoman told local reporters that the company believes that investing in CyberWorks will, in the long term, bring a good return for its shareholders. The deal has CyberWorks acquiring a profitable satellite communications company for no cash down, at a time when it wants to expand but also needs to control debt. Hutchison said it has decided to divest its satellite business to concentrate on wireless investments. "This was all done at arm's-length," said Linus Cheung, CyberWorks' deputy chairman, brushing aside suggestions that the deal was anything but a commercial one. "[Hutchison Whampoa] wanted to dispose of it anyway." Appropriately, the satellite business that Li is buying back from his father is now largely the one previously sold to him for no profit. Analysts decided that purchase by Hutchison in 1995 was a move by father to rescue son. Essentially, the elder Li folded his son's unprofitable business into his own extensive empire. The younger Li has in the past defended that sale as a way to avoid what he saw as a conflict of interest that could have occurred as he was building his own business and still working as a vice chairman at Hutchison. When CyberWorks propelled him onto the business stage last year, the fiercely independent younger Li downplayed any connection between his father and his own success, asking reporters not mention the "f" word in stories and openly disparaging his father's businesses. CyberWorks closed Friday at 58 cents, up 4 percent. thestandard.com