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

To: ms.smartest.person who wrote (913)	4/2/2001 4:00:27 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

C&W to Sell Bond Convertible Into PCCW Shares (Update4) Apr 02, 2001 - 14:53:20 HKT Quamnet News Service Cable & Wireless Plc of the U.K., the second-largest shareholder of Pacific Century CyberWorks (0008), is selling a bond convertible into its entire 14.7 percent stake, or about 3.259 billion shares, in the Hong Kong-based communications company, raising net proceeds of US$1.5 billion. C&W said the bond will carry a zero coupon rate, and that the minimum exchange price has been set at HK$3.60. If not exchanged, the bonds will be redeemd at par on June 9, 2003, when it matures. The bond sale is expected to be completed on or before April 12. The bond has been rated A2 by Moody's and A by Standard & Poor's. UBS Warburg is handling the transaction. A banker at Warburg told Quamnet News that C&W is selling at an exchange ratio of every US$1,000 of the par value of the bond for every 2,052.55 to 2,166.85 PCCW shares, which translates into a conversion price of HK$3.59 to HK$3.80 (on the assumption that the exchange rate is fixed at HK$7.8 per US$1). The final terms of the bonds will be fixed late today or tomorrow. Meantime, C&W and PCCW said in separate statements that Graham Wallace and Robert Lerwill, both of whom are directors of C&W, have resigned from its board with effect from noon on April 1. The bond sale came days after PCCW posted a record US$886 million net loss for 2000, and wrote off US$22 billion of HKT goodwill against its reserves, leading to a shareholders' deficit of US$1.8 billion. The announcement made it easier for potential investors in PCCW to fix a price for its shares. PCCW, which owns Hong Kong's largest phone company, asked that its shares be suspended today pending statements to be made by itself and its substantial shareholder C&W. Trading is expected to resume tomorrow. Twenty derivative warrants of PCCW have been suspended pending announcements concerning "price sensitive information" by the company and C&W, said PCCW in a statement to the local exchange. PCCW's parent Pacific Century Regional Development Ltd. was also suspended in Singapore pending a statement by PCCW. C&W Plc received a 20.2 percent stake in PCCW last year when it sold its Hong Kong unit to the then Hong Kong-listed Internet investment company. It last year swapped with CMGI Inc. US$500 million worth of shares in PCCW for those in the Nasdaq-listed firm, cutting its stake to 19.1 percent, and had then sold another 4.9 percent stake in the Hong Kong company in September. In September last year, almost immediately after a first lock-up period expired, C&W sold all its allowed block of 4.9 percent stake in PCCW for HK$10.3 billion, leaving it a 15 percent stake in the company. At that time, it sold 1.04 billion shares at HK$9.88 each, or an 8 percent discount to PCCW's then market price, but PCCW shares had plunged by almost a fifth in the following days. The British phone company can start selling half of its remaining stake -- which was recently diluted to 7.35 percent from 7.5 percent -- after Feb. 17, 2001, and the rest of the stake after Aug. 17. PCCW said it irrevocably agreed with C&W to allow it to sell its other 7.35 percent stake in the company before the lock-up expires in August, provided that the U.K. company can complete the sale on or before April 12. C&W said it will use the proceeds from the sale to invest in accordance with its cash management policies, without being more specific. PCCW shares shed 5.4 percent to HK$3.075 last Friday. quamnet.com