Billionaire Richard Li (李澤楷) may seek to spin off PCCW Ltd’s (電訊盈科) telecommunications assets, at least his sixth attempt to reorganize Hong Kong’s biggest phone company after it underperformed rivals.
PCCW rose 4.6 percent as of the noon trading break in Hong Kong yesterday, headed for the stock’s biggest two-day gain since January last year, after the company said it’s in talks with regulators in Hong Kong to list the assets separately as a business trust.
Li’s plan follows a failed attempt to take PCCW private in 2009, when a Hong Kong court ruled that a shareholder vote was manipulated.
PCCW, with businesses including property development and television, fell 4.7 percent in Hong Kong trading from the start of the year to last week’s close, while shares of SmarTone Telecommunications Holdings Ltd (澳門數碼通) jumped 77 percent and Hutchison Telecommunications Hong Kong Holdings Ltd (和記電訊香港控股) gained 11 percent during the same period.
“The capital that’ll be raised from the spinoff will help them develop new businesses,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “Borrowing costs are now rising, so it may be a good moment for the company to reduce its debt.”
Telecommunications businesses, including fixed-line, Internet, mobile-phone, pay-television and computing services, accounted for more than 90 percent of PCCW’s first-half revenue of HK$11.8 billion (US$1.5 billion), with the rest coming from property. Spokeswoman Anita Choi declined to comment on which of the company’s assets would be included in the proposed spinoff.
Li Ka-shing (李嘉誠), Hong Kong’s richest man and the PCCW chairman’s father, spun off some container-terminal operations from Hutchison Whampoa Ltd (和記黃埔) earlier this month. The newly formed investment trust, Hutchison Port Holdings Trust (和記港口控股信托), fell 5.9 percent on its first day of trading in Singapore on Friday.
PCCW has lost more than 90 percent of its value since the younger Li in 2000 used his Internet start-up Pacific Century Cyberworks Ltd to take over Cable & Wireless HKT, the former phone monopoly in Hong Kong, to create a company valued at about US$41 billion in the biggest merger between two Asian firms at the time. PCCW has a market value of HK$24.9 billion.
Li, 44, was unable to sell his controlling holding in PCCW to former Citigroup Inc banker Francis Leung (梁伯韜) in 2006 after failing to secure minority shareholder approval.
That followed unsuccessful bids to sell PCCW’s main telecommunications assets to TPG Inc and Macquarie Group Ltd in the same year.
In October 2008, PCCW scrapped the proposed sale of as much as 45 percent of its HKT Group Holdings Ltd (HKT集團控股) unit, owner of the company’s main telecommunications and pay-television businesses, citing a lack of attractive offers during the global financial crisis.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
DIGITAL COMMERCE: In 2016, only 2 percent of orders were delivered in Taiwan, but that has risen to 10 percent, Foodpanda Taiwan Co operations director Nick Yu said Online food delivery platforms have seen explosive growth in Taiwan this year, helped by business opportunities related to the COVID-19 pandemic, company executives said at a digital commerce conference in Taipei yesterday. When the threat of COVID-19 kept people from going out to eat, more people experimented with ordering food deliveries online, Foodpanda Taiwan Co Ltd (富胖達) operations director Nick Yu (余岳勳) said. Foodpanda started operations in Taiwan in 2012. “We experienced 5,000 percent growth in the past 24 months,” Yu said. “That’s more than the previous six years combined.” In 2016, only 2 percent of food orders were delivered in Taiwan, but that