Asia’s Richest Man to Underwrite Telecom Sale
HONG KONG ~ Tycoon Li Ka-shing, Asia’s richest man, is to help finance his son Richard Li’s controversial sale of ailing Hong Kong telecom company PCCW, a statement from the prospective buyer said.
Billionaire Li will stump up HK$4 billion (US$517 million) as part of a consortium of backers behind financier Francis Leung’s $9-billion offer to buy Richard Li’s 23-percent controlling stake in the fixed-line operator.
The money will be donated to the tycoon’s charity organization, the Li Ka Shing Foundation, which will in turn purchase a 10-percent stake in PCCW as an investment.
The Canadian arm of the foundation will buy a further 2 percent stake and Leung will buy 2.56 percent, paid for in part with a loan from Li Ka-shing.
The complex deal will also see Spain’s Telefonica take an 8-percent share in cooperation with China Netcom, the Hong Kong business of China’s second-largest fixed-line company China Networks, which will emerge as the largest stakeholder in PCCW.
The deal appears to end a row over the sale of the once-mighty PCCW, sparked earlier this year when Richard Li began courting two potential overseas buyers who were ready to pay up to US$7 billion for the company.
China Network, which owns 20 percent of PCCW, opposed the sale, a move many interpreted as a directive from the Chinese government, which has made clear it does not want foreign investors to have control of such strategic assets.
Leung, a long-time close associate of Li Ka-shing, then stepped in with a much lower offer, which Richard Li accepted, prompting local calls for a probe into the propriety of the arrangement.Filed under: