PCCW shareholders accept $2b buyout plan

Hong Kong's incumbent PCCW has become a private company after minority shareholders approved a buyout plan from chairman Richard Li.

The vote, after a seven-hour meeting on Wednesday, ends a tumultuous era in which Li, the son of Hong Kong's richest man, acquired the city's biggest telco at the height of the dotcom bubble.

PCCW's minority shareholders approved Richard Li's buyout plan despite attempts to postpone the vote.

Some shareholders had requested the vote be delayed until after the company concludes its investigation into vote-tampering allegations, Channel News Asia reported.

Although the request was denied, Richard Li managed to secure more than the required 75% of votes in favor of the HK$4.50 per share offer.

Li and China Unicom will now pay around HK$16.2 billion ($2.1 billion) for the remaining 52% stake in PCCW and take the company private.

The deal will still need High Court approval before the stock is delisted. A hearing is set for February 24, scmp.com reported.

Separately, PCCW announced it will cut hundreds of jobs as part of a series of cost-cutting measures designed to keep the company afloat during the economic downturn.

The company has not specified how many jobs will go, but its staff union has warned that up to 600 jobs - or 5% of PCCW's workforce - are at risk, RTHK has reported. The employee's union is considering staff action in protest of the layoffs.

The company hopes these measures will help it cut costs by up to 30%, RTHK said.

"It is clear that the global economy has slowed down substantially and the Hong Kong economy is also slowing," a PCCW representative said in a statement. "This is a prudent reaction to the reality in the market."

PCCW did stress that the cuts will not be across the board, and that the company will continue to recruit staff in business areas still experiencing growth.

The operator's workforce has increased 40% to 17,000 employees in the past four years, PCCW said.

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