PCCW abandons disposal plan

Hong Kong’s leading operator PCCW said this week that it has abandoned plans to offload a 45 per cent stake in its newly founded quad play unit, HKT Group, as a result of the economic crisis.

The Hong Kong firm said it had received “substantial interest and formal proposals from several bidders” for the acquisition of the minority stake in HKT. However, PCCW said that the recent market downturn has “significantly impacted the offers received” and “does not believe the proposals are sufficiently attractive”.

Nevertheless, PCCW confirmed that it still plans to proceed with its previously announced reorganisation of its businesses under HKT. The company announced plans to consolidate its quad play offerings into a new company called HKT Group and offload 45 per cent of the operation in May of this year.

This latest development is another blow to tycoon Richard Li’s attempts to sell off the company’s assets after a 2006 effort was foiled by shareholders including 20 per cent PCCW stakeholder China Netcom.

PCCW has turned out to be a poor investment for Li, and the story of his attempts to dispose of it has been full of twists and turns. During the proposed sale two years ago, it emerged that Li’s father and Asia’s richest man, Li Ka-Shing, was involved in the consortium proposing to buy the carrier, exposing a family rift and preventing Li from voting on the sale.

Under the restructuring announced in the summer, HKT will consolidate PCCW’s fixed line, broadband, internet, TV and mobile services. But this time only 45 per cent of the new company is up for grabs, rather than 100 per cent. PCCW will keep the controlling stake, and as a result, will maintain the backing of China Netcom.