Far EasTone Telecom to Purchase China Network Systems Corporate Bonds
Published By : 31 Jul 2015 | Published By : QYRESEARCH
Far EasTone Telecommunications Co. of Taiwan announced that it is planning to purchase the corporate bonds of China Network Systems on Thursday, July 30th, 2015. It has said that it will spend around NT$17.12 billion for this procurement.
China Network Systems is the biggest cable TV operator in Taiwan and this move is widely considered as the first step of EasTone Telecommunications to acquire the Cable giant. The procurement is a collaborative venture between Far EasTone and MSPE Asia. MSPE Asia will have a 60% stake in the procured company. The move also indicates towards Far EasTone’s intentions to widen its digital content capability and to make an entry into the smart home market.
Far EasTone one of the biggest mobile telecommunication company in Taiwan. Whereas, CNS possess a customer base of around 1.30 million households, accounting for almost 25% of the domestic market.
As per the regulations in Taiwan, the government, the military, and the political parties cannot invest in cable TV network. This is the main reason behind Far EasTone preferring to invest through bonds instead of purchasing stocks.
Under this collaborative venture with MSPE Asia, the company does not own any share, but it will hold the bonds for 7 years, and may own the shares if amendments it rules that ban military, government, and political parties for investing in cable TV network in Taiwan are lifted. However, in case, if the rules are not modified, the company will continue to hold the bonds, stated a spokesperson of the company. The company wants to hold stakes in CNS only through authentic means, he added.