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

To: ms.smartest.person who wrote (986)	4/4/2001 8:07:41 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

PCCW falls despite bond plan By Rahul Jacob in Hong Kong Published: April 3 2001 13:21GMT \| Last Updated: April 4 2001 09:47GMT Shares of Pacific Century CyberWorks, the beleaguered Hong Kong internet and telecoms firm, fell 11 per cent on Tuesday to HK$ 2.73, signalling that an exchangeable bond by Cable and Wireless had failed to turn round negative sentiment on the company. The huge overhang of shares that C&W was expected to sell over the next few months as it deposed of its 14.7 percent stake in PCCW, which was part of the payment it received in a cash and shares deal to sell its Hong Kong subsidiary last year, had been seen as one of many factors depressing PCCW's share price. Fund managers said on Tuesday that the zero coupon exchangeable bond that matures on June 9, 2003 and is convertible into PCCW shares at HK$3.6, appeared to have encouraged hedge funds to use the convertible bonds to short the stock further. "Most of the buyers of the exchangeable bond issue could be hedge fund investors , who are taking up the issue to hedge their positions," said Francis Wong of American Express Asset Management in Hong Kong. On Monday, PCCW chairman Richard Li had characterised the US$1.5 bn exchangeable bond from C&W that enables the British telecommunications firm to offload its stake as a "milestone" for the medium and long term, but he said he expected volatility in the sort-term. On Tuesday Mr Li's comments about the exchangeable bond deal aimed at shoring up the share price were overshadowed in Hong Kong media by coverage of his explanation of why his company had distributed publicity material that incorrectly claimed that he had graduated from Stanford University, a controversy that has dogged Mr Li for the past fortnight. The exchangeable bond also appears to have been interpreted as a sign that C&W is eager to get rid of its stake as soon as possible, said analysts and institutional investors. "I don't think the sale has removed the uncertainty. It has brought forward the selling pressure," said an institutional investor. Rchard Ferguson, an analyst with Nomura International, said that C&W's haste in selling the shares suggested they believed PCCW did not have promising future. "At the end of the day, the deal transfers ownership but it doesn't resolve the questions PCCW faces about its debt levels, its strategy and its financing," said Mr Ferguson. Addressing such concerns on Monday, senior PCCW executives said that the company has $1.6 billion in cash and no immediate need to raise funds through equity financing. The company said that it had non-core assets that it could dispose of relatively quickly to raise an additional US$1 bn. markets.ft.com