US$55m phone venture

Hong Kong's CM Telecom International will team up with a number of institutional investors to make its first foray into the mainland mobile phone market, establishing a US$55.75 million joint venture in Guangdong.

The new company, to be called CM Mobile Telecom (Hong Kong), will co-operate with mainland group China Motion Telecom Development (CMTD), and offer GSM (global system for mobile telecommunications) mobile phone services.

CMTD is a state-owned company operating paging services in Shenzhen, along the Pearl River Delta and other big Chinese cities.

It is already CM Telecom's largest customer and joint venture partner in a number of other projects in China.

In this latest project, CM Telecom's institutional partners will be Asiavest Investment Management, Capital International, Walden Group, Nichimen Corp and Suez Asia.

The five will hold a combined 48.14 per cent stake in CM Mobile and will advance a total $46.6 million in loans to the joint venture. CM Telecom, which is listed on Singapore's foreign board, will invest a further $9.15 million of its own funds in the project, to be financed through internal resources and borrowing.