Korea Thrunet to bid for Powercomm stake
Korea Thrunet Co. Ltd. says it intends to bid on Korea Electric Power Corp.'s 30 percent stake in Powercomm. KEPCO, which owns 89.5 percent of Powercomm, plans to sell the stake in a single block and transfer management control to the buyer.
The buyer also will get an option to pick up an additional 5 percent in shares as part of the deal.
Powercomm operates a nationwide fiber optic and HFC network. Korea Thrunet is the country's largest cable modem broadband Internet-access service provider, it says. KEPCO is selling the stake — some 45 million shares — as part of a long-term privatization plan for the company. It sold a 10.5 percent interest in July 2000 and expects to sell the 30 percent stake by the end of 2001. The privatization should be complete by the end of next year, Thrunet says.
Thrunet will submit a letter of intent to bid by Aug. 10, and a detailed financial plan to KEPCO by the end of September. A bidder should be selected by the end of October and the transaction should conclude in November.
Thrunet also says it received approval from major shareholders, including Softbank Corp., which, with SB Asia Infrastructure Fund, will contribute more than $1.05 billion to help fund the bid, Thrunet says. The company adds that it will open participation to other investors, as well. Thrunet Senior VP and CFO Charles Rim says the company has used Powercomm's network since its inception and Thrunet accounts for 20 percent of Powercomm's total revenue.
The deal, he says, would help consolidate Korea's telecom industry, specifically in broadband Internet.