PCCW Fall Another 3% Worrying Leung's Funds Source

• IBTimes RSS
• Print
• E-Mail
• digg
• Del.icio.us

Since the expectation for privatizing PCCW was broken, coupled with the special dividends distributed by PCCW Chairman Richard Li Tzar are lower than expected, in addition to increased uncertainty, which the buyer Francis Leung's funding sources are increasingly doubt so that the market worried whether his future ways to raising money is benefit to PCCW's development; and S&P showed some worries on PCCW's prospects, all these affected PCCW'S prices.

PCCW Chairman Richard Li Tzar announced Monday to sell about 23% of PCCW shares, about 9.16 billion yuan, to investment bankers Francis Leung's private company as the way "seller funding". Market and political remains to concern whether the Leung's funds come from Cheung Kong (Holdings) Limited Chairman Li Ka-shing, Richard Li Tzar's father , and if the transaction will refer to the anti-competitive behaviour regulated in "Telecommunications Regulations". Faced with the rumors, Li Ka-shing didn't make response to the reporter's question and didn't make a clarification. But Richard Li said his father didn't involved in the transactions.

There are also some worries about the uncertain PCCW major shareholders and management in the market, and some confusion on the PCCW's future development direction.

According to PCCW's announcement that buyer can gains a financial arrangements, but have to pay 6.5% interest, and Francis Leung recently indicated that 70% of the funds for Richard Li can be paid in a long term. According to the transaction's terms between Mr Richard Li and Francis Leung, the buyer will pay in three phases - 30% paid in the first phase before December 14 of this year; in the second phase, 780 million have to be paid, and the remains to be paid in the last period