LG Telecom says BT sale was expected

LG Telecom downplayed yesterday British Telecom’s sale of its entire stake in the Korean company, saying that British Telecom had made its plans known for two years. LG Telecom Ltd., the smallest of the three mobile carriers in Korea, said British Telecom, its second-largest shareholder, offered five-year exchangeable bonds, worth $175 million, on Monday, that are convertible into its entire 16.6 percent stake in LG Telecom. European institutional investors bought all the bonds by yesterday. “At a 17.5 percent premium to LG Telecom’s current share price and an interest rate of only 0.75 percent, the exchangeable bonds represent a very efficient way for British Telecom to monetize its shareholding in LG Telecom,” said Graham Moore, president of BT Asia Pacific. “This was specifically designed for BT to divest one of its remaining non-core investments in Asia Pacific,” said David Clarke, a spokesman of BT Asia Pacific. Mr. Clarke did not respond to the question of whether LG Group’s recent failure to take over Hanaro Telecom prompted BT’s sale. LG officials said British Telecom was not a very helpful stakeholder. “British Telecom was the second-largest shareholder in LG Telecom, yet had its own financial problems,” said Lee Jung-hwan, a spokesman for LG Telecom. “Thus it used to take very conservative positions in board of directors’ meetings when we needed new investments.” Mr. Lee denied that BT’s action was a result of the LG Telecom’s recent failure to get a firmer grip on Hanaro Telecom, the second-largest high-speed Internet service provider in Korea. “We believe it was a part of broader scheme for British Telecom to withdraw from the Asian market,” he said. In 1998 and 1999, British Telecom bought its stake in LG Telecom at about 13,000 won ($11) an average per share. On the Kosdaq market, LG Telecom shares edged up 1.2 percent yesterday to close at 3,810 won. by Kim Hyo-jin