CCT Telecom Holdings has returned with a privatisation plan for its undervalued telecommunications products manufacturing and sales arm CCT Tech International for the second time in less than a year. The company is planning to privatise CCT Tech by way of a scheme of arrangement constituting a major transaction for CCT Telecom, according to an announcement from the company yesterday. The share price for CCT Tech was 2.2 cents yesterday, compared with the privatisation price of 2.3 cents proposed in January. The parent company, CCT Telecom, was priced at 9.4 cents. Both stocks were suspended yesterday pending the publication of a more detailed announcement. The privatisation of CCT Tech was derailed by minority shareholders in January with the consequence that CCT Telecom could raise its shareholding from 34.51 per cent to only 84.12 per cent upon completion of the offers. To restore the public float, CCT Telecom sold 1.5 billion existing shares on July 22 to a third party with a six-month put option granted to the buyer. CCT Tech is a potential gold mine with a net cash level of $450 million on June 30, with additional accounts receivables of up to $688.3 million from just two big customers. However, the market capitalisation of the stock has been undervalued at $350.65 million at 2.2 cents per share. It is understandable that the parent, CCT Telecom, has been keeping a close eye on the cash reserves of the company. The company plans to take a different tack and privatise the company through a scheme or arrangement that is more likely to see the acquirer take full control in the face of minority shareholder opposition. Recently, PCCW applied a scheme of arrangement to put pressure on minority shareholder Huawei, which holds 48.02 per cent in one of the group's six mobile operators. However, it is not only the privatisation plan that has raised investors' eyebrows. The CCT privatisation - coming as it does within a year of an unsuccessful attempt - could also be in breach of the Takeovers Code. As well, DBS, the investment bank that acted as the financial adviser for the previous attempt, has said it would not be playing a part in the second float.