AsiaSat still keen to go private despite US rebuff

PUBLISHED : Thursday, 26 April, 2007, 12:00am
UPDATED : Thursday, 26 April, 2007, 12:00am

Asia Satellite Telecommunications Holdings, which on Tuesday failed to get approval from the United States Department of State to privatise, said its shareholders might seek another privatisation in the future although getting US approval would still be necessary.

'The US State Department never gave us guidelines or came back and said: 'You can do it in this way or that way',' AsiaSat deputy chief executive William Wade said yesterday. 'All we know is they obviously did not like the fact that we will be a private company with Citic Group and GE Capital [Equity Investments] owning 50 per cent each.

'Certainly, we are disappointed but there is not a lot we can do.'

AsiaSat, of which State Council-controlled Citic owns 34.8 per cent and US-based GE Capital 34.1 per cent, in February said Modernday, since renamed AsiaCo, had agreed to pay HK$2.3 billion, or HK$18.30 per share, to privatise the satellite operator.

AsiaCo, a joint venture equally owned by Citic and GE Capital, bought its AsiaSat stake in a deal that was finalised last month.

On Tuesday, AsiaSat said the privatisation could not be implemented as it did not get approval from the US.

Under listing rules, the company cannot propose the same plan within one year but can propose an alternative.

Analysts said the US disapproval was based on national security concerns, a view Mr Wade declined to comment on.

The US government had a licensing system to restrict foreign companies from exporting 'sensitive technologies and equipment', including satellites, to other countries, he said.

'AsiaSat had purchased all its satellites from the US and over the years we have been subject to evaluation of the company's ownership and operations, so we were used to the US licensing process,' Mr Wade said.

'Our shareholders may look at other privatisation proposals but whatever process and method we will use in the future, we need to do it with US approval.'

Shares in AsiaSat fell 5.93 per cent to close at HK$16.50 yesterday when trading resumed.