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

To: ms.smartest.person who wrote (1642)	7/15/2001 2:10:36 AM
From: ms.smartest.person	Respond to of 2248

FEER - SPOTLIGHT: TOUGH CALL By Tom Holland Executives of Richard Li's Pacific Century CyberWorks hit the road on July 9, looking to borrow at least $2.5 billion from investors just days after firing 340 Internet staff in a bid to cut costs. If successful, PCCW's debt deal could well be the largest-ever corporate bond from non-Japan Asia, but to many Hong Kong financiers the issue smacks of desperation. PCCW is floundering under the weight of the $5 billion in debt it racked up last year to pay for its takeover of Hong Kong Telecom from Britain's Cable & Wireless. With three-quarters of that amount due for repayment in the next four years, the company urgently needs fresh long-term financing. But with the Internet out of favour, and global capital markets already saturated with telecoms companies' debt, PCCW will have to pay interest charges as much as three percentage points above the yield on comparable U.S. government bonds if it is to raise new money. Chairman Li's solution has been to cut back ambitious plans for a $1.5 billion global Web-based television service and slash his Internet division, which haemorrhaged $261 million last year, contributing heavily to PCCW's overall losses of $886 million (or $1.87 billion under more stringent U.S. accounting standards). So far, however, investors have reacted warily to PCCW's cutbacks. At around HK$2.35 (30 cents), the company's share price re-mains down over 90% from its February 2000 peak.