Pacific Century Regional Developments, a Singapore-listed company 75 per cent owned by PCCW chairman Richard Li Tzar-kai, said it was not providing a loan to help fund Francis Leung Pak-to's planned acquisition of its 22.66 per cent stake in Hong Kong's dominant fixed-line telephone operator for $9.1 billion.
The statement adds further confusion to what is already one of the stranger tales of Hong Kong corporate finance since it directly contradicts earlier assertions by Mr Li that the company would lend Mr Leung $6.4 billion, about 70 per cent of the purchase price.
PCRD in a statement said that Mr Leung, a former Citigroup banker, would pay the company $9.1 billion in three instalments over an 18-month period at 6.5 per cent interest.
'The clarification was due to market rumours and has the approval of the Singapore stock exchange,' a source said.
Mr Leung, through a recently created holding company called Fiorlatte, agreed last week to pay $6 a share for Mr Li's stake in PCCW.
The phone company's shares, which closed at $4.95 yesterday, have not traded as high as $6 each since April 2004.
Mr Leung, who has no experience running a telecommunications company, has said he will put together a group of investors to join in his offer by November. Mr Li will step down as chairman that same month.