US chip giant Intel will invest $US50 million in a newly created company -- Pacific Century CyberWorks -- owned by Hong Kong's Pacific Century Group (PCG).
The move is an attempt to push forward broadband Internet initiatives in Asia, the companies said.
The announcement is also being seen here as providing a boost to the Cyberport initiative since PCG is best known as the power behind the $HK13 billion ($2.5 billion) project. Cyberport aims to create Hong Kong's own multimedia development complex to boost the special administrative region's standing in the IT world.
Intel's $50 million investment is subject to the successful completion of PCG's $HK2.46 billion purchase of a 75 per cent stake in local telecomms services provider Tricom Holdings Ltd. Given that Tricom shareholders approved the deal on Thursday, the acquisition should be completed today, according to reports in Monday's press. Tricom will then be renamed Pacific Century CyberWorks Ltd.
Pacific Century CyberWorks will become PCG's flagship IT operation with the task to both handle the Cyberport negotiations with the Hong Kong government and to invest in both local and international IT and Internet companies. The new company will also subsume Intel's existing broadband joint venture with PCG, known as Pacific Convergence Corp. (PCC), the firms said in a statement issued yesterday. PCC will become a wholly owned subsidiary of Pacific Century CyberWorks.
Intel and PCG formed PCC in March of last year, with the Hong Kong company holding a 60 per cent share to Intel's 40 per cent.
When added together, Intel's stake in PCC plus the chip giant's upcoming $50 million investment will give the US company about a 13 per cent stake in Pacific Century CyberWorks.
Additionally, under the terms of this agreement, Intel will supply the necessary hardware in terms of set-top boxes and servers based on its own chip architecture to support Pacific Century CyberWorks' broadband ambitions, according to the statement.
On PCG's Web site, the company talks about its yet-to-be-launched broadband and Net operations enabling it to become the leading Net service, content and electronic provider reaching 110 million households across Asia. Specifics on exactly how PCG hopes to achieve such a goal are still sketchy, although company executives are promising to begin delivery of broadband services later this year.
Privately held PCG operates in the areas of digital media development, financial services and infrastructure.