Stakeholder welcomes PCCW asset sale

14 Jul 2006

State-run China Netcom, which owns 20% of PCCW, has welcomed Hong Kong financier Francis Leung's investment in the city's dominant telecom's operator, an AFP report said.
The AFP report quoted a China Netcom statement which said the group "welcomes Mr. Leung's participation and believes that he will contribute to the continued and healthy development of PCCW.'
Earlier reports said Leung had reached an agreement to buy a 23% stake in PCCW from chairman Richard Li for a total of $1.17 billion.
China Netcom, which had opposed Li's proposed sale of the company's core telecom and media assets, said it would maintain and strengthen its strategic partnership with PCCW, the report said.
Leung's deal effectively thwarts rival offers from Australia's Macquarie Bank and US-based TPG Newbridge for PCCW's core telecom and media assets, reports said.
In a separate statement, PCCW said, however, that it would continue to discuss with Macquarie Bank and TPG Newbridge about their plans.
The company said it would make a further announcement once both parties had 'clarified their intentions.'
Analysts said PCCW had faced possible objections on security and nationalist grounds from Beijing if it sold key telecom assets to foreign investors.

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