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October 13, 2011

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PCCW set to spin off and list unit

Source: Agencies | 01:02 UTC+8 October 13, 2011 | Print Edition

HONG Kong's PCCW Ltd got the green light from shareholders yesterday for its plan to spin off and list its multi-billion dollar telecoms unit, paving the way for owner Richard Li to create the media empire he has yearned for.

But whether Li can become a media tycoon like Rupert Murdoch remains unclear given the financial constraints of PCCW, stiff competition in the media industry and regulations in Hong Kong and Chinese mainland that could tie his hands, analysts and bankers said.

Li, the younger son of Hong Kong tycoon Li Ka-shing, is set to expand his television business in Hong Kong and the mainland in what's left of PCCW, which consists of pay-TV operator now TV, an information technology solutions business and some property assets.

"As the market stabilizes, we will go full steam ahead with the spinoff and listing plans that will benefit our shareholders," Li said during a shareholders' meeting yesterday.

"For 'now TV,' we are trying to enhance our production capabilities because we would like to pursue developments in overseas markets."

He will be keen to delve into media-related business on the mainland and expand the company's Hong Kong footprint after PCCW obtains a free-to-air TV license, which will help boost its TV advertising revenue, analysts and bankers said.

"Richard Li has always been more interested in media than the telecoms business," said a banker in Hong Kong. "In his mind, it's a valuable business, but whether the public will look at it the same way will depend on how much cash he can generate for the business."

The banker declined to be identified because he is not authorized to talk to the media. There is no guarantee PCCW will launch the spinoff in the near future.


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