ChinaTel wins $640m backing for China Wimax plan

California-headquartered ChinaTel Group has won $640 million in investments to back its plans to build Wimax networks in China.

 

The OTC-listed firm said Hong Kong investment company Excel Era Limited would invest $480 million and take a 36% stake in the company. Canadian-based investor Isaac Organization will tip in $160 million for a 12% holding.

 

The investments value ChinaTel at $1.33 billion, the company said in a statement. 

 

ChinaTel says it will have received $241 million by March 1, with the balance of $399 million to be paid by June 1.

 

ChinaTel CEO George Alvarez said the fresh capital would enable the company to speed the deployment of a Wimax network for Chinese operator CECT-Chinacomm.

 

He said the rollout in 12 cities would be completed by June 2011. Chinacomm has the rights to build a 3.5GHz Wimax network in 29 Chinese cities.

 

The Isaac Organization, headed by Tony Isaac, had previously served as advisor to the company and managed a $5 billion portfolio, with “significant interests in Asia,” ChinaTel said.

 

Isaac will take a seat on the ChinaTel board, as will Excel CEO Charles Wang. The secretive Excel group says it has $200 billion in funds under management in India and South America.