Bid to buy out AsiaSat seen by US as resale of restricted technology
The United States Department of State vetoed the joint HK$2.3 billion privatisation bid from state-owned Citic Group and a unit of General Electric for Asia Satellite Telecommunications Holdings because it was considered a resale of restricted technology, AsiaSat's chief executive disclosed yesterday.
Peter Jackson was reacting to the first public comments by the State Department on the deal, clarifying that it did not object to the privatisation bid itself but the technology transfers involved.
'Whenever you buy very high technology from the US there is always a restriction on selling it,' Mr Jackson said. 'The point that they made was that this would be a sale, the ownership of AsiaSat was changing so significantly that they would consider it a sale and therefore they wouldn't approve it.'
Declining to specify what its objections were, the department said its practice in such cases was simply to issue advice on the likelihood that a company such as AsiaSat would continue to be able to receive US exports of hi-tech equipment and services following completion of the deal.
'The Department of State has had no direct role in the proposed private ownership plan,' a spokesman for the US consulate in Hong Kong said yesterday, citing correspondence from Washington.
'The State Department does not approve or disapprove mergers and acquisitions involving US and/or foreign companies, nor does it approve or disapprove their decisions regarding public or private ownership.'
In announcing the termination of the privatisation deal last week, just two hours before the company's shareholders were set to vote on the offer, the Hong Kong-listed satellite operator said in a statement to the stock exchange: 'The US Department of State ... said it will not grant the approval necessary to implement the proposed privatisation of AsiaSat.'
The aborted bid would have given 50 per cent shareholdings in AsiaSat to Citic and US-based GE Capital Equity Investments.
AsiaSat operates three US-built communications satellites with another on order from Californian-based Space Systems/Loral.
Since the Tiananmen Square incident in 1989, the US has banned exports of military equipment to the mainland. However, it has allowed satellite-related equipment and services to be exported to companies such as AsiaSat on the grounds that the transactions are deemed to be in the US national interest.
Shares in AsiaSat fell 1.19 per cent yesterday to close at HK$16.60.