Buyout raises concern over technology transfer
Asia Satellite Telecommunications Holdings, which operates three satellites covering the region, said the United States Department of State had refused to approve a privatisation plan proposed by AsiaCo, a joint venture between China's State Council-controlled Citic Group and GE Capital Equity Investments of the US.
Asia Satellite made the announcement in a statement filed with the Hong Kong stock exchange less than two hours before its shareholders were to vote on the privatisation yesterday morning, saying the meeting was 'indefinitely adjourned'.
'The State Department's disapproval was due to national security reasons, as Citic will keep a 50 per cent stake in the company after the privatisation,' said an analyst. 'The US government is afraid of the transfer of any satellite technology to China which may threaten national security.'
On February 14, AsiaSat's shares rose 25.5 per cent to HK$17 after it said Modernday, since renamed AsiaCo, agreed to pay HK$2.3 billion or HK$18.30 per share to take the satellite company private.
Citic, which reports directly to Beijing, has a 34.8 per cent effective interest in AsiaSat. GE Capital - a General Electric subsidiary - owns a 34.1 per cent stake, bought in a deal finalised on March 29 from Luxembourg-listed SES, the world's largest satellite broadcaster, by giving up its own 19 per cent stake in SES.