No plans to sell stake in takeover target: Richard Li

PCCW chairman Richard Li Tzar-kai said yesterday he has no plans to sell his stake in the company whose parent is the target of a privatisation proposal by private equity fund Newbridge Capital.

Newbridge Capital and a group of associates from its founder Texas Pacific Group last month announced a $1 billion buyout of Pacific Century Regional Development (PCRD) minority shareholders who hold 25 per cent of the firm at S$0.27 ($1.29) per share.

PCRD is a Singapore-listed investment holding company which has a 23 per cent stake in PCCW and 46.9 per cent of Pacific Century Insurance Holdings (PCI). The market had speculated the deal could pave the way for Mr Li to end his investment in PCCW after it acquired Hongkong Telecom in 2000.

'I have no intention to quit the investment in PCCW, and in fact it is my idea to introduce Texas Pacific to make the offer for all public shareholders of PCRD,' Mr Li said yesterday after visiting his mother's tomb in Chai Wan.

Once the deal goes through - likely within five months - Mr Li will still hold a 75 per cent stake in PCRD. The deal would make US-based Newbridge Capital the third largest shareholder of PCCW with a stake of 5.7 per cent. Mr Li holds 20.85 per cent and China Netcom Group 20 per cent.

Mr Li said he had long intended to reinforce the corporate governance and management capability of PCCW and PCI.

'I am not allowed to do the deal [sell shares to Texas Pacific and Newbridge Capital] by myself. Several regulatory hurdles bar me from doing this. The privatisation scheme is another option to let Texas Pacific participate in both companies' operations,' Mr Li said