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Asia Netcom sale talks value firm at $350 mln -source

Written by: Staff
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SHANGHAI, Mar 27 (Reuters) China Netcom Group Corp., China's No. 2 fixed-line phone operator, has received dozens of queries about its Asia Netcom asset since putting it on the market, a source in China close to the sale said on Monday.

A 100 percent sale of the company is the strongest option for the asset, a regional telecoms network operator that was known as Asia Global Crossing when Netcom purchased it out of insolvency in 2003, said the source, speaking on condition of anonymity.

Current talks would value the company at about 0 million or more, with a preliminary deal possible as early as next month, the source said.

Groups interested in the unit include consortia from Britain and Australia, and several operators from India, according to the source, who declined to be more specific.

An Asia Netcom spokeswoman had no comment.

Netcom has quietly been shopping the asset for the last few months, receiving strong interest from groups led by India's VSNL and British businessman Simon Murray, executive chairman of General Enterprise Management Services Ltd., a private equity fund, a source had previously told Reuters.

Murray has connections to the region through his former role as head of Hong Kong ports-to-telecoms conglomerate Hutchison Whampoa, and in his current role as Asia chairman of corporate finance for Australia's Macquarie Bank.

The Indian bidders like Asia Netcom for its strong presence in East Asia, which would complement their strength in South Asia.

The 0 million price tag could be above the 0 million plus assumption of undisclosed liabilities that Netcom paid for the asset at the depth of the telecoms bust when the market was flooded with excess capacity and prices plummeted.

The market has recently begun to stabilise with the rise of broadband Internet and other complex telecoms applications, such as video conferencing, that require large amounts of network capacity.

China Netcom shares rose 1.5 per cent to HK.75 on Monday, outperforming a 0.75 per cent gain in the broader market. The stock had gained just over 9 per cent in the last three months through Friday's close.

REUTERS SD DS1632

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