CWHKT<0008> - Announcement
Cable & Wireless HKT Limited
CABLE & WIRELESS HKT AND STAR TELEVISION ANNOUNCE SIGNING OF PAY
TELEVISION AND INTERNET JOINT VENTURE AGREEMENT
Cable & Wireless HKT Limited ("Cable & Wireless HKT") and Star Television
Limited ("STAR TV") today (19 January 2000) announced that the parties
have finalised the terms of their agreement to form a joint venture
company ("JV Company") and operate a pay television and Internet business
as contemplated under the Memorandum of Understanding between the parties,
details of which were announced on 10 November 1999.
The JV Company will initially be 60 per cent owned by Cable & Wireless HKT
and 40 per cent owned by STAR TV. Cable & Wireless HKT will also be
issued with warrants that will potentially enable Cable & Wireless HKT to
increase its shareholding in the JV Company to 70 per cent, subject to
certain conditions including payment of an exercise price calculated by
reference to the market capitalization of the JV Company at the time the
warrants are exercised. In addition to the common shares and warrants to
be issued to Cable & Wireless HKT, Cable & Wireless HKT will be issued
with US$300 million in five-year redeemable non-voting cumulative
preference shares with a coupon rate equivalent to the five-year United
States Treasury Bill rate in exchange for its contribution of assets to
the JV Company.
The JV Company will draw upon Cable & Wireless HKT's broadband technology,
interactive television and market-leading Internet services, and STAR TV's
premium satellite television content and expertise in media, broadcasting
and programming. The JV Company will be operated as an independent company
with its own management team and board of directors.
The Board would like to emphasize that formation of the JV Company and
commencement of its business operations remain subject to the granting of
any licences required for the JV Company to conduct the business as
contemplated by the parties. No assurance can be given that this
condition will be satisfied or that the JV Company will be able to conduct
the business as contemplated by the parties.
The JV Company intends to deliver services to customers through television
and computers using a combination of direct satellite delivery, digital
subscriber line and other technologies to deploy a network providing
consumers with optimal choice of services and features. Subject to
obtaining necessary regulatory approvals and licences, it is expected that
the JV Company will commence business operations during 2000 in Hong Kong,
with a view to expanding into other major markets in the Asia region as
and when regulations permit.
INVESTORS ARE ADVISED TO EXERCISE CAUTION IN DEALING IN THE SHARES OF
CABLE & WIRELESS HKT.
By Order of the Board
Donald J Hess
Company Secretary
Hong Kong, 19 January 2000
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