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Eric Ng

CCT Telecom Holdings and NTT Communications are to announce today a stake increase for NTT in CCT's Internet service provider subsidiary HKNet, a move that will help its listing chances.

CCT chairman Clement Mak Shiu-tong said NTT president Masanobu Suzuki would come to Hong Kong today to unveil details of NTT's stake increase and strategy for HKNet.

Mr Mak was speaking after an announcement yesterday by Atlinks chief operating officer Bob Giordano that CCT had been awarded an order for about 10 million units of telecoms products.

CCT is a manufacturer of telecoms equipment - mainly cordless telephones. It has recently diversified into mobile phones. It also has interests in various multimedia, Internet access service and content provision ventures.

CCT said in August it was in talks with NTT on a possible stake sale which would lift NTT's holding to 70 to 75 per cent from 49 per cent.

If NTT took a controlling stake, it would facilitate a listing by HKNet, Mr Mak said.

'With NTT coming out to lead the [listing's marketing] roadshow and to look for underwriters, I'm sure it would result in a higher valuation for HKNet than a listing led by CCT,' he said.

NTT is a unit of Japanese telecommunications giant Nippon Telegraph & Telephone.

Mr Mak rejected suggestions that CCT is selling the additional stake to NTT because it is having difficulty pulling off the listing amid poor investment sentiment towards Internet-related stocks.

CCT said in early May it had applied for a Growth Enterprise Market listing.

Mr Mak would not disclose the selling price of the additional stake to NTT.

But he said HKNet's valuation would 'definitely' be higher than that of the 49 per cent sold to NTT last year.

CCT booked about HK$100 million in profit from the disposal of the 49 per cent stake in HKNet to NTT.

Mr Mak said that with cash of about HK$500 million, CCT was looking at opportunities to invest in the interactive and network television business.

But telecoms equipment manufacturing would remain the company's 'bread-and-butter' business, he said.



NTT takes control of service provider in drive for listing