CCT TELECOM<0138> - Announcement
The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this announcement, makes no representation as to its accuracy
or completeness and expressly disclaims any liability whatsoever for any
loss howsoever arising from or in reliance upon the whole or any part of
the contents of this announcement.
CCT TELECOM HOLDINGS LIMITED
(Incorporated in the Cayman Islands with limited liability)
NTT COMMUNICATIONS PURCHASES 49% OF HKNET
FROM THE COMPANY
Further to the announcement of the Company on 14th July 1999 regarding the
proposed disposal by the Group of the 49% Interest in HKNet, the Board
announces the Sale Agreement was entered into by, inter alia, HKNet
Holdings, a wholly-owned subsidiary of the Company, as vendor and NTT
Communications as purchaser on 26th July 1999 for the disposal of the 49%
Interest in HKNet.
Further to the announcement of CCT Telecom Holdings Limited ("Company") on
14th July 1999, the board ("Board") of the Company wishes to announce that
on 26th July 1999, a sale and purchase agreement ("Sale Agreement") was
entered into by, inter alia, HKNet Holdings Limited ("HKNet Holdings",
which was incorporated in the British Virgin Islands on 16th November 1995
and which is a wholly-owned subsidiary of the Company) and NTT
Communications Corporation ("NTT Communications") in relation to a
disposal by HKNet Holdings a 49% equity interest ("49% Interest") in HKNet
Company Limited ("HKNet", which was incorporated in Hong Kong on 4th
January 1994 and which is a wholly-owned subsidiary of HKNet Holdings).
The principal activity of HKNet Holdings is investment holding. Save for
the interest in HKNet, HKNet Holdings presently does not have other
material or active business activities or investment. Upon the completion
of the Sale Agreement, HKNet Holdings will maintain the remaining majority
stake of 51% in HKNet and HKNet will remain as a subsidiary of the
Company.
NTT Communications is a third party not connected with the directors,
chief executive or substantial shareholder of the Company or its
subsidiaries, or any of their respective associates (as defined in the
Rules ("Listing Rules") Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited.
The consideration for the sale of the 49% Interest was HK$98,000,000 and
was arrived at arm's length negotiation with reference to a combination of
factors including HKNet's present performance and future potential and
will be settled in cash upon completion. The Sale Agreement does not
constitute a discloseable transaction of the Company under the Listing
Rules.
Completion of the Sale Agreement is conditional upon, among other things,
:-
(i) the obtaining at all consents, approvals, clearances and
authorizations of any governmental authorities or other relevant third
parties as would be necessary on the part of the Company or HKNet Holdings
for the execution and implementation of the Sale Agreement; and
(ii) the receipt by HKNet Group (as hereinafter defined) all relevant
consents and approvals from third parties including without limitation
regulatory approval, as would be necessary for the proposed change in the
shareholding of HKNet including, without limitation, the
telecommunications licence(s) of HKNet Group (as hereinafter defined).
HKNet presently has one wholly-owned subsidiary, H.K. 1618 Comm Limited
("HK 1618", together with HKNet, referred to as "HKNet Group"), which was
incorporated in Hong Kong on 26th February 1999. HKNet is presently
engaged in Internet related services ("Internet Services") in Hong Kong
while HK 1618 in international direct dial services ("IDD Services") in
Hong Kong.
As at 31st December 1998 (the date the latest audited account was issued),
HKNet has total net tangible assets of HK$3,443,570 and the net profit or
loss before/after tax of HKNet for the years ended 31st December 1998 and
31st December 1997 were respectively profit HK$87,489 and loss of
HK$775,421. As HK 1618 was incorporated in early 1999, it did not exist
on 31st December 1998 and no audited account has ever been issued. The
net deficit of HK 1618 as per the latest management account as at 31st May
1999 was HK$3,242,013.
The holding company ("NTT") of NTT Communications is publicly listed in
Japan. NTT and its subsidiaries, including NTT Communications, ("NTT
Group") have a significant presence in Japan and is a major
telecommunications provider in the world. NTT Group provides local and
long distance, global and cellular telecommunications services, data
communications services and multimedia services. In Japan, NTT Group
supplies services to approximately 60 million residential and business
customers in Japan through a fully digital network. It also has more than
20 million cellular telephone subscribers in Japan. NTT Group has been
providing global end-to-end services under the brand name of "Arcstar"
since 1997 and investing in and participating in many telecommunications
projects particularly in the Asia Pacific region.
Upon completion of the Sale Agreement, NTT Communications will appoint two
representatives to the board of directors of each of HKNet and HK 1618
while the Company will maintain three representatives thereon. Save for
the change of the board compositions of HKNet Group, there will be no
significant change to both the management and business directions of HKNet
Group and HKNet Group will continue its existing business plans set ahead
with tight business co-operation with NTT Group in the future to develop
the Internet Services and the IDD Services of HKNet Group.
The Board is of the view that with the prestige name of NTT in the global
telecommunications industry and the possible technology transfer from NTT
to HKNet in the underlying co-operation, the Company will in turn benefit
from an access to the international telecommunications sector and an
enhanced presence of HKNet Group in the industry.
Upon completion of the Sale Agreement, the new board of HKNet will
continue to focus on seeking a listing of HKNet on Nasdaq or other stock
exchange. Nevertheless, no concrete discussion among the new board of
HKNet has been carried out and no fixed timetable or decision has yet been
determined.
On behalf of the Board
Clement Mak
Chairman
Hong Kong, 26th July 1999
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