Mon, Sep 25, 2006 - Page 12 News List

Leung vows to give details on buyers before PCCW vote

BLOOMBERG AND AFP , HONG KONG

Francis Leung (梁伯韜) said he'll provide details about a group he's assembling to buy part of Hong Kong-based PCCW Ltd (電訊盈科), the territory's biggest telephone company, before stakeholders vote on the transaction.

Leung, a former Citigroup Inc banker, is seeking to buy a HK$9.2 billion (US$1.18 billion) stake from Richard Li (李澤楷), son of billionaire Li Ka-shing (李嘉誠). Singapore-listed Pacific Century Regional Developments Ltd (PCRD) holds most of Li's PCCW stake.

"It is my intention to be in a position to provide clear details of the consortium [including the identity of the consortium members] before PCRD's shareholders consider and vote on the transaction," Leung said in a facsimile sent to Bloomberg News.

"At this point in time, whilst good progress has been made, the identity of the consortium members and the consortium structure has not yet been determined," he said.

Li Ka-shing said last month that he wouldn't try to gain control of PCCW, which provides service to 68 percent of Hong Kong's fixed-line phones. He declined to say whether he'd be among Leung's investors.

"I have never denied or confirmed any particular person's involvement nor have I said that any particular person will never be involved in the consortium," Leung said.

On Thursday, PCRD said in a statement that the PCCW's controversial sale was initially financed by Li Ka-shing.

The statement said an initial HK$500 million deposit on the sale was paid with the funds drawn on a facility provided by the elder Li. It said the funds were provided before the negotiations on the deal began and for purposes that were unrelated to the sale, and added that the money paid on July 10 was repaid nine days after.

"Li Ka-shing has no interest in the refinancing," the statement said, adding that father and son did not discuss the sale during the negotiations.

There was speculation at the time of the sale that Richard Li was bailed out by Leung with the help of his father after his move to sell his stake in a key strategic communications asset attracted strong foreign interest.

Talks with the foreign companies such as Australia's Macquarie Bank and US investment house TPG-Newbridge ended after opposition by the state-owned China Netcom Communications Group (中國網絡通訊集團), PCCW's second-largest shareholder with a 20 percent stake.

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