China Cable and Communication to Buy Two Core Fiber Optic Backbone Network
Posted on: Monday, 14 June 2004, 06:00 CDT
China Cable and Communication, Inc., a leading China-based cable TV company, Monday announced it has entered into an agreement to acquire, in a number of phases, from Beijing Zhongminjing Technology Development Co., Ltd., through an arms length commercial transaction, a two core fiber optic backbone network covering 410 cities nationwide with a total physical length of 34,800 kilometers in China.
This backbone network covers all 23 provinces, 5 autonomous regions, and 4 centrally administrative municipalities. Completion of this transaction is subject to due diligenceand third party determination of the values upon which the purchase price will be based.
The total physical length of 34,800 kilometers optical fiber was laid and passed the acceptance tests set out by the Ministry of Information Industry ("MII") of the People's Republic of China in November 2000. The acceptance license was issued by MII in the same year. This fiber optics backbone network is not yet equipped with a transmission and switching system. China Cable and Communication will undertake, or will provide leases to service providers, to fully equip systems for this backbone network in order to provide support to a wide range of communication protocols and services capabilities. The construction cost of the Network is estimated at RMB2 billion (some US$235 million). The final contract purchase price of this fiber optic backbone network will be based on the appraised value determined by internationally renowned valuation experts.
Kaijun Yang, Chairman of the Board of China Cable Communication said, "While the undertakings in this transaction are extensive, the fact is that upon consummation we are going to be a fiber optics backbone provider in China. This is a significant deal because we believe that we are talking about becoming one of the largest and most important communication companies inChina. That makes the challenge road ahead of us in completing this transaction very worthwhile," explained Mr. Yang.
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