PCCW CONFIRMS JOINT VENTURES WITH TELSTRA PCCW has finalised a deal with Telstra incorporating three joint ventures - a global IP backbone company, a cellular phone company and an international data centre. PCCW plans to spin off the IP backbone and cellular companies in the next 12 months, and we expect the cellular company will be the first candidate, in the 1Q01. This company only consists of Hong Kong cellular business from HKT at the moment. We expect PCCW and Telstra to inject MobileOne, the Singapore telco, and some Australian telecom business, respectively, before the joint venture is spun off.
Net debt level will be reduced to US$4.8bn - PCCW will receive US$3bn cash from Telstra; US$1.5bn for a convertible bond and US$1.5bn for a 40% stake in the cellular joint venture. PCCW will inject US$1.1bn debt into the IP backbone joint venture. PCCW's net debt position will therefore be reduced to around US$4.8bn, including its existing US$3bn cash reserve.
Analyst: Kenneth Lau (852) 2820 6407
Email: kennethl@sctrade.co
Net debt level will be reduced to US$4.8bn - PCCW will receive US$3bn cash from Telstra; US$1.5bn for a convertible bond and US$1.5bn for a 40% stake in the cellular joint venture. PCCW will inject US$1.1bn debt into the IP backbone joint venture. PCCW's net debt position will therefore be reduced to around US$4.8bn, including its existing US$3bn cash reserve.
Analyst: Kenneth Lau (852) 2820 6407
Email: kennethl@sctrade.co
