China Netcom Corp (Hong Kong), the SAR arm of China's third-largest telecom carrier, has secured a deal to acquire assets fromc, in the first such acquisition by a mainland carrier.
The fixed-line operator plans to partner with Newbridge Capital and Softbank Asia Infrastructure Fund to create a new firm with US$270 million in equity and bank loans to take over the network's business operations, AGC said in a US filing for bankruptcy.
'This is the first cross-border acquisition of the telecom business by a Chinese company . . . it is an important demonstration of China's desire to participate in global businesses,' said Salomon Smith Barney director David Putnam, the financial adviser to the consortium.
The three-party consortium will take over AGC's East Asia Crossing assets and its operations - a 18,740-kilometre undersea cable, linking Hong Kong, Taiwan, South Korea, Singapore, the Philippines and Malaysia.
The assets do not include Pacific Crossing, a US-Japan undersea cable link, that filed for chapter 11 bankruptcy protection to the US in July.
Under the proposed work-out deal, the new company will assume contractual obligations of between US$277 million and US$1.13 billion, depending on the valuation of contracts. AGC creditors will share US$81.2 million of the firm's residual cash.