KT Freetel to exit U-Mobile (part 2)

Received an interesting comment from <-DT-&gt, who shared his/ her views on other motives behind KT Freetel's sale of U Mobile stakes.

http://telcoblog.nst.com.my/2009/04/whats-happening-to-u-mobile.html

In a nutshell, other motives for the sale could be due to the merger of KT Freetel and KT Corp. Selling stakes in U Mobile and/ or other "non-essential assets/ investments" will help lessen the group's burden in financing cost.

Good point!

I guess at the end of the day, if U Mobile is such a cash-cow, and brings in loads of profits, I believe the it will be more "cost efficient" for the group to get the necessary financing from banks.

I do not have the KT Freetel's regulatory filing with me. But according to the Bloomberg article:

"KT FREETEL Co, the second-largest South Korean wireless service provider, will sell a 16.5 per cent stake in U Mobile Sdn for at least US$100 million (RM360 million) to avoid losses on its investment. KT Freetel will sell the 62.6 million shares to U Mobile’s major shareholder, it said yesterday in a regulatory filing. — Bloomberg"

Thanks for the comments and emails, pls keep them coming.

Below are some updates on KT Corp and KT Freetel merger.

http://www.reuters.com/article/rbssIntegratedTelecommunicationsServices/idUSSEO10386720090311