PCCW - Corporate History

Corporate History

PCCW was formed by Richard Li, the younger son of Hong Kong tycoon Li Ka Shing. Formerly Pacific Century Development, it was an investment holding company. The company's English name was changed from "Pacific Century CyberWorks Limited" to "PCCW Limited" on 9 August 2002.

It then won a controversial land deal, acquiring valuable waterfront real estate from the government without any public auction bids. Many in Hong Kong cried cronyism, as the Hong Kong Government, under chief executive Tung Chee Hwa, gave away the land to his new high-tech residential and commercial venture called Cyberport.

The stock of Pacific Century CyberWorks from $6.00 to $19.50 in December 1 to 28, 1999. Dec 23 is a Heritage of Pacific Century CyberWorks, break record of single company in Hong Kong history with 5 billion dollars transaction. Pacific Century CyberWorks become the seventh ( value over 170 billion HKD ) listing company in Hong Kong Exchange in Dec 28, 1999.

PCCW acquired Hong Kong Telecom (HKT) in August 2000, which was formerly known as the Hong Kong Telephone Company (founded in 1925). Initially, HKT owner Cable & Wireless entertained a bid from Singapore Telecommunications, but there was Beijing concern about a Singapore company owning the largest Hong Kong telephone system. PCCW entered the scene and offered Cable and Wireless PCCW stock and US$11 billion in bank loans by HSBC, Bank of China, BNP Paribas & Barclays. The acquisition vaulted PCCW from a dot-com holdings company to one of the largest universal corporations in Hong Kong. PCCW is now also the leading Internet service provider in Hong Kong, using the Netvigator brand for dialup modem and DSL service. PCCW has been the object of much scorn in Hong Kong as a result of the HKT purchase. In 2003 the company's stock price was down 96 percent from its 2000 peak. In the face of challenges due to debt, intense local telecoms competition and a struggling international joint venture Reach (50/50 owned by PCCW and Telstra), PCCW was the worst-performing blue chip on the Hong Kong Stock Exchange (HKSE) in 2002 and 2003.

In 2003, Cable and Wireless finished cashing in all the stock from the 14.7 percent stake it had in PCCW. Worth US$5 billion at the time of the 2000 acquisition of HKT, the stock sales yielded only $1.9 billion in the end.

Richard Li gave up his spot as PCCW's chief executive officer in July 2003 but remained as chairman and executive director. Jack So, who left his chairman position at Hong Kong subway operator MTR Corporation Limited, took up the job of group managing director at PCCW on 25 July 2003.