Posts filed under ‘China Netcom’
PCCW’s minority shareholders yesterday approved a proposal to take the Hong Kong-based telco private, but the securities regulator will launch an investigation following allegations of vote-buying, reports Bloomberg. PCCW’s largest shareholder, chairman Richard Li, and major stakeholder China Netcom (part of China Unicom) offered HKD15.9 billion (USD2.05 billion), or HKD4.50 per share, for the remaining 52% of PCCW, and the offer was supported by more than 75% of stockholders. The deal requires High Court approval before the shares are delisted, and a hearing is set for 24 February. The Securities & Futures Commission immediately took possession of the voting records and will start investigating the buyout process, following allegations that insurance agents were offered stock in return for supporting the proposal. PCCW said it has ‘no knowledge of any improper share transfers.’ PCCW’s shares have lost 97% of their value since Li took control of the former Cable & Wireless HKT in 2000. The company has a market capitalisation of USD3.6 billion based on yesterday’s share price. The fixed line, broadband, mobile and TV operator saw its first-half net profits slump by 20% last year.
In other news PCCW yesterday confirmed that it plans to implement measures to cut its costs by up to 30%, including redundancies, but declined to divulge the potential number of jobs that will be lost. Union staff had earlier alleged that the group planned to lay off 600 employees, or around 5% of its workforce. PCCW has increased its staff total by 40% to 17,000 in the last four years.
According to a spokesman for the Ministry of Industry and Information Technology, China Telecom and China Netcom (now part of China Unicom) have been ordered to close their XiaoLingTong (XLT, or Little Smart) PHS networks so as to clear the spectrum for the use of TD-SCDMA, the Chinese homegrown 3G standard. The low-cost PHS service grew rapidly following its launch in 1998, claiming more than 100 million subscribers at its peak. Its popularity prompted cellular operators China Mobile and China Unicom to slash prices, resulting in a fall in XLT users to 68.9 million at the end of 2008.