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February 22, 2008 |
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HANARO: Korean Gov't Gives Takeover Signal OK to SK Telecom South Korea's Information and Communication Ministry gave final approval to SK Telecom Co.'s proposed acquisition of hanarotelecom Inc., though not without conditions, various reports say. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 20, 2007, SK Telecom Co. has applied for government approval to purchase a controlling stake in hanarotelecom. SK Telecom agreed to buy hanarotelecom for KRW1.09 trillion in cash, a near 50% premium on pre-acquisition talks, the TCR-AP noted. SK Telekom will buy the stake from a consortium led by Newbridge Capital and AIG earlier this month. Under local law, the TCR-AP explained, any company is required to get approval from the ministry before taking over more than a 15% stake or becoming the largest shareholder of a communications carrier that provides services to the general public. Upon the approval, Reuters relates, the Ministry of Information and Communication ordered both companies to take steps to protect users and help fair competition in the telecoms market. Both companies should not also force users and marketing agents to choose their packaged services, while SK must offer its mobile service for other companies on the same terms as with hanarotelecom. The ministry, The Herald says, also endorsed SK Telecom's current monopoly of the 800-megahertz frequency band until June 30, 2011, the report notes. The Herald points out that SK Telecom's smaller domestic rivals, KT Freetel and LG Telecom, have been asking for frequency sharing or frequency leasing from the company. A prolonged monopoly could hurt fair competition in the telecommunications market, the report says. Lee Ki-joo, director general of the ministry's Telecommunications & Broadcasting Policy Bureau told The Herald that the ministry will draw up a comprehensive plan within this year on how to redistribute the frequency band among the country's telecommunications firms in three years. About hanarotelecom hanarotelecom Inc. -- http://www.hanaro.com/ -- is the second largest player in the Korean local telephone market. It provides high-speed Internet services in Korea. It provides high-speed Internet services in Korea. In June 2001, the company integrated broadband Internet access services which included ADSL, Hybrid Fiber Coaxial cables and Broadband Wireless Local Loop into a single brand called HanaFOS. hanarotelecom offers VoIP services to its broadband business customers as a bundled service and also as a stand alone service. * * * hanarotelecom carries Moody's Investors Service's Ba2 long-term corporate family and senior unsecured debt ratings. Standard and Poor's gave hanarotelecom 'BB' long-term foreign issuer credit and long-term local foreign issuer credit ratings. |
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