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SCMP Reporter

Dividend promise sweetens deal for loss-making mobile-phone firm

Minority shareholders in mobile operator Sunday Communications yesterday approved the sale of its main operating assets to parent company PCCW for HK$1.94 billion.

Sunday chairman Alex Arena said 99.5 per cent of shareholders attending the special general meeting voted in favour of the sale of assets including the mobile network and the third-generation mobile-telephone licence.

Huawei Technologies, China's largest telecommunications equipment maker holding 9.9 per cent of Sunday, also voted for it. Huawei rejected PCCW's offer last year to privatise Sunday because PCCW did not propose to issue dividends after the deal.

This time, a special payment of 65 HK cents a share will be distributed to Sunday's independent shareholders from the proceeds of the assets sale.

Sunday's listing will be withdrawn from the main board in Hong Kong this month  and on the Nasdaq in the US on December 21.

'The withdrawal could help the company save a couple of million in administration costs each year,' Mr Arena said.

Sunday, the smallest mobile operator in the city, reported its net loss widened to HK$270.5 million for the first half, compared with  HK$61 million a year ago, amid a competitive operating environment in Hong Kong.

Its shares were listed on March 16, 2000, at HK$3.78 and have slumped  83 per cent to their last close of 64 HK cents before trading was suspended yesterday.

'Sunday has been a well-known brand for a long time but it's time for us to think about whether we need to keep the two brands (PCCW and Sunday) at the same time,'  Mr Arena said.

JP Morgan said in a report  the transaction will not have a material impact on PCCW's operations and financial performance in the  short term due to the weak contribution from Sunday.



Sunday shareholders approve sale of assets