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MUMBAI: Asian satellite service provider Asiasat has said
that its major shareholder plans to take the company private
to allow management to focus on business development in a
competitive market.
Under the proposed privatisation there will be a scheme of
arrangement under which all shares, including all shares underlying
American Depositary Shares (ADS), not already held by Asiasat’s
controlling shareholder will be cancelled in exchange for
the share offer price of HK$18.30 per share.
For Asiasat shareholders, the cancellation price of HK$18.30
per share represents a premium of approximately 30.7 per cent
over the closing price of HK$14 per share as quoted on the
Hong Kong Stock Exchange on 8 February 2007, the day prior
to the suspension of Asiasat’s shares.
An announcement said that the privatisation follows persistent
over-supply of transponder capacity and the slow introduction
of new applications in the Asia-Pacific region. As a result,
the satellite market in the region remains very competitive,
and Asiasat’s share price has not performed satisfactorily.
The offeror is a BVI incorporated company jointly owned by
Able Star, an indirect wholly-owned subsidiary of CITIC Group,
and GE Equity, an indirect wholly-owned subsidiary of General
Electric Capital Corporation. The General Electric group is
also proposing to acquire an interest in AsiaSat’s controlling
shareholder. On completion of the acquisition and the privatisation,
Asiasat will be jointly indirectly owned by CITIC Group and
General Electrical Capital Corporation.
In the three year period prior to the announcement date,
the price of AsiaSat’s shares decreased by 11.9 per cent
compared to an increase of 51.1 per cent in the Hang Seng
Index over the same period. The proposed privatisation would
give the management of AsiaSat greater flexibility to focus
on the development of business and marketing activities.
It would also relieve Asiasat of the heavy financial and
administrative burden of dual listings on both the Hong Kong
Stock Exchange and the New York Stock Exchange, which are
disproportionate to the benefits of maintaining such listings.
The proposed privatisation is subject to a number of conditions.
It is the intention of Offeror to maintain the existing business
of AsiaSat upon the successful privatisation of AsiaSat. No
major changes to the existing operating and management structure
are expected to be introduced as a result of the implementation
of the privatisation. For AsiaSat customers, there will be
no change.
The total amount of cash required to effect the privatisation
is approximately HK$2,235 million, which will be financed
with from the existing resources of CITIC Group and GE Equity.
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