PAC CENT CYBER<1186> - Announcement & Resumption
The Stock Exchange of Hong Kong Limited (the `Stock Exchange') takes
no responsibility for the contents of this announcement, makes no
representation as to its accuracy or completeness and expressly
disclaims any liability whatsoever for any loss howsoever arising
from or in reliance upon the whole or any part of the contents of
this announcement.
PACIFIC CENTURY CYBERWORKS LIMITED
(Incorporated in Hong Kong with limited liability)
ANNOUNCEMENT
The Directors of Pacific Century CyberWorks Limited wish to
clarify certain details relating to its portfolio of investments in
internet-related companies and the market value as at 16 March 2000
of four major investments in such portfolio. These investments are
held for long term purposes and the market value of the investment
portfolio is subject to short term share price fluctuations.
The directors (the `Directors') of Pacific Century CyberWorks
Limited (`PCCW') refer to various newspaper reports appearing on
Friday, 17 March 2000, in relation to the value of PCCW's portfolio
of investments in internet-related companies.
The Directors wish to clarify that PCCW has a portfolio of
investments in internet-related companies currently comprising over
40 investments, of which 14 such investments are in securities which
are listed on recognised stock exchanges and the market value of the
portfolio is subject to short term share price fluctuations. Within
this portfolio there are four major investments, details of which
have previously been publicly disclosed, as detailed below.
Investment Date of No. Of Acquisition Market Market Difference
Announcement Shares Cost Value as Value as
Acquired at at Between
31/12/99 16/03/00 Acquisition
Cost
and
Market
Value as at
16/03/00
(US$m) (US$m) (US$m) (US$m)
CMGI, 23 8,115,942 350.0 1,123.5 1,007.9 657.9
Inc. September
1999
SoftNet 13 5,000,000 128.7 125.6 163.1 34.4
Systems, October
Inc. 1999
Golden 28 233,400,000 27.0 483.0 267.6 240.6
Power December
International 1999(3)
Holdings
Limited
SUB-TOTAL 505.7 1,732.1 1,438.6 932.9
tom.com 18 121,000,000 16.6 N/A 171.5 154.9
limited February
2000
TOTAL 522.3 1,732.1 1,610.1 1,087.8
before
adjustment
Adjustment(1) - (83.6) (62.3) (62.3)
TOTAL 522.3 1,648.5 1,547.8 1,025.5
after
adjustment
HK$ 4,063.5 12,825.3 12,041.9 7,978.4
equivalent(2)
(1) The adjustment reflects the financial effect of `put' and `call'
hedging arrangements which have been entered into in respect of
certain of the above securities which had an aggregate acquisition
cost of US$64.7 million.
(2) An exchange rate of US$1 to HK$7.78 is used throughout this
announcement.
(3) Completion of acquisition took place on 10 March 2000.
PCCW's four major investments as detailed above have all previously
been announced. Their market value and acquisition cost are public
information and as a result do not constitute a profit forecast
within the meaning of Rule 10 of the Hong Kong Codes on Takeovers and
Mergers.
The Directors wish to clarify that all of the four major investments
detailed above are held for long term strategic purposes and are
classified by PCCW as `Investment Securities' in its accounts, except
for a portion which is subject to hedging transactions and is held
for capital gains purposes classified as `Other Investments' in its
accounts, in accordance with SSAP24 issued by the Hong Kong Society
of Accountants.
Of the remaining listed investments in the portfolio (which comprise
both `Investment Securities' and `Other Investments'), their current
market value as at 16 March 2000 and acquisition cost amounted to
US$29.8 million and US$12.6 million respectively.
Contrary to certain newspaper reports that PCCW would book US$1
billion of gains on its investment portfolio, for the year ended 31
December 1999, PCCW will only book realised and unrealised gains on
`Other Investments' of US$73.8 million, of which US$4.8 million is
realised and US$69.0 million is unrealised. It is not PCCW's
accounting policy to book unrealised gains on `Investment
Securities'. The board meeting of PCCW to approve its financial
results for the year ended 31 December 1999 will be held on Monday,
20 March 2000 and the results announcement including details of gains
on `Other Investments' is expected to be released on that date and
published in the newspapers on Tuesday, 21 March 2000.
In relation to references in newspaper reports also appearing on
Friday, 17 March 2000, concerning the Star TV - Cable & Wireless HKT
joint venture and talks between Richard Li and News Corp. chairman
Rupert Murdoch, the Directors also wish to clarify that preliminary
discussions between Richard Li and Rupert Murdoch have been held and
it has been agreed that dialogue between the two parties will
continue, but no timetable has been determined within which such
dialogue must take place or within which any conclusion must be
reached.
In relation to the investment in Data Access, an Indian Internet
service provider also referred to in certain press reports, the
Directors wish to clarify that an application has been filed with the
Foreign Investment Promotion Board of India in connection with PCCW's
proposed acquisition of a 49% stake in Data Access.
The shares of PCCW were suspended from trading during Friday, 17
March 2000 at the request of PCCW and application will be made to the
Stock Exchange for resumption of trading in shares of PCCW,
commencing at 10:00am on Monday, 20 March 2000.
By Order of the Board
Helen Chu
Company Secretary
Hong Kong, 18 March, 2000
The Directors jointly and severally accept full responsibility for
the accuracy of information contained in this announcement and
confirm, having made all reasonable enquiries, that to the best of
their knowledge, opinions expressed in this announcement have been
arrived at after due and careful consideration and there are no other
facts not contained in this announcement, the omission of which would
make any statement in this announcement misleading.
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