The final hurdle in the estimated HK$209.49 billion merger plan between Cable & Wireless HKT and Pacific Century CyberWorks is expected to be cleared in fine style today when HKT shareholders meet to vote on the plan. Shareholders with a combined 12.18 billion shares in the SAR's dominant telecommunications operator will be at the HKT extraordinary general meeting. 'Just as in the previous two meetings, this time the vote will also be overwhelmingly positive,' a source close to the deal said confidently. Another source said: 'The proxies we have received [from HKT shareholders] are already sufficient to approve the merger plan. 'If not, I would not be so relaxed talking to you.' Local securities law requires at least 75 per cent of the proxies and shareholders at the meeting approve the merger. Shareholders who have submitted favourable proxy votes included China Telecom, which holds about 10.8 per cent of HKT. The Government, which holds between 7 per cent and 8 per cent through the Exchange Fund, also voted in favour of the deal on its proxy. Meanwhile, executives from both HKT and CyberWorks have also successfully solicited several major funds and institution which hold substantial stakes in HKT to support the deal. When added to the 54 per cent of so of HKT held by London-based parent Cable & Wireless (C&W), the sources said, merger support was already 'overwhelming'. CyberWorks has cleared two major hurdles on its plan to merge with HKT. The first was when C&W's shareholders agreed the company should back up CyberWorks' plan to merge with HKT. On June 13, the vote saw 97.5 per cent of C&W shareholders approve the deal to proceed with the merger. The second hurdle was to win support from CyberWorks' shareholders on the deal. That agreement came at the June 23 CyberWorks shareholders' meeting, which was unanimously in favour of going ahead with the merger. That leaves only today's meeting to conclude the initial process. The next step, if today's meeting of HKT shareholders gives the green light for the CyberWorks/HKT merger proposal, is a court hearing, to be held on July 25, to sanction the proposed scheme of arrangement. This will effectively conclude the necessary procedures for the merger plan between Asia's No 2 Internet company and HKT. If the process proceeds smoothly, shares in HKT will be suspended from trading on August 1 and the merger will be complete on August 10 - when HKT shares will be withdrawn from listing on the exchange. New CyberWorks shares and cheques are expected to be sent out to HKT shareholders on or before August 15. HSBC Securities estimates that, right after the approval of the merger, the new company, the combination of CyberWorks and HKT, will have net debt of US$8.4 billion - representing a gearing of 115 per cent. However, the gearing level will be quickly brought down to 67 per cent with the pending US$3 billion deal in place with Australia's Telstra. Under this proposal, Telstra has agreed to invest US$1.5 billion in exchange for a 40 per cent stake in HKT's mobile business and another US$1.5 billion for convertible notes in the merged entity. Assuming that all HKT shareholders opt for the cash and shares offer, CyberWorks would hold 36.4 per cent of the new entity with C&W's stake diluted to 19.7 per cent. C&W is allowed to dispose of 4.9 per cent of the merged entity, which was worth HK$14.7 billion as of last Friday's stock prices, as soon as August 10. S G Securities analyst Jonathan Iu said an immediate disposal by the British company would create short-term pricing pressures, but this would be partly offset by the fact that the merged entity was the largest stock in the Morgan Stanley Capital Index. For this reason global, telecom and index fund managers might need to increase their weightings in the merged entity. Shares in HKT eased 35 HK cents, or 2 per cent, to close at HK$17.15 on Friday, while CyberWorks shares finished 15 HK cents lower, or off 0.96 of a per cent, to close at HK$15.40.