Nachricht von heute:das australische government ist pushing for a deal.Der soll am 2.November entschieden werden.Wenn das mit Telstra klappt,geht es wieder etwas aufwärts PCCW (8) and Telstra Still Dancing [ Quote ] [ Chart ] [ NetTraderCards ]
05 Oct ,2000
The burst of the telecommunications bubble has brought those TMT stocks back from the weightless outer space to Earth to follow the economic law of gravity. Our small superman Richard Li Tzar-kai's space shuttle -- Pacific Century CyberWorks (HKSE:0008) -- also landed hard on more solid ground. The stock price has slid more than 45% from HK$16.55 in August to lower than HK$9 in late September and hovering between HK$8 and HK$9 for the last two weeks. Triggered by the landslide-type price movement of PCCW, Australia's Telstra was forced to hold back its original enthusiastic participation and re-negotiate for better terms.
In April, Telstra agreed to buy 40% of HKT's mobile phone assets for US$1.5 billion and buy US$1.5 billion in debt convertible into PCCW shares at HK$19.2. Telstra was earlier tipped to reveal the final terms of its US$3 billion (HK$23.4 billion) investment in PCCW by Tuesday. However, the share crash of PCCW made Telstra postpone a formal announcement on the final terms of the proposed alliance with PCCW.
Though the big bosses are still playing hard in a tough game, the outcome is likely to be in favour of Telstra's shareholders as PCCW is now begging for more cash to release it from an over-weighted debt burden. Market rumors are that Telstra will cut back its investment in PCCW's convertible bond by US$500 million down to only US$1 billion but end up with slightly more than 2% PCCW to reflect the 46% slide in share price and adjusted speculated conversion price of HK$13.6 each. However, for the mobile joint venture, in order to secure a controlling stake in the venture, Telstra may keep the size of its donation at US$1.5 billion but obtain a larger stake in the venture. Telstra's total money outflow will therefore drop to US$2.5 billion, but the Australian telecom will end up with a large stake in both PCCW and the mobile venture.
Both companies are likely to devote their efforts to striving for satisfactory terms. Intense discussions are expected to continue before November 2 as the major holder of Telstra, the Australian government, is pushing for a final deal. Though no confirmation had yet been received, it is hopefully good news for PCCW, that at least one plan probably may not fall through.
www.quamnet.com