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Asia Business Headlines - 2002-02-01

In business headlines from around Asia, two companies make a joint bid for a majority stake in an ailing American telecoms firm.

Hong Kong's Hutchison Whampoa and Singapore Technologies Telemedia have unveiled plans to jointly purchase a majority stake in Global Crossing, the struggling telecommunications firm.

The two companies' commitment would add up to a $750 million bail out of Global Crossing, which has made the fourth-largest Chapter 11 bankruptcy filing in U.S. history.

Hutchison and STT said Monday that they would each take a stake of 35 to 40 percent subject to regulators' and creditors' approval by August this year.

James Holmes, principal consultant for the Australia-based Ovum consultancy, says the deal illustrates how telecom asset values have diminished. "It is just part of the rationalization of the industry in an economic downturn," he says. "It is what typically would happen when you have excess capacity and a decline in demand." In South Korea, a consortium led by private U.S. equity fund, Carlyle Group, has won a majority stake in Kumho Tire, the nation's second largest tire maker.

Kumho's parent company is selling up to 80 percent of the unlisted tire maker for up to $1.5 billion in order to pay off debt.

Malaysia's flag carrier will be reorganized. The debt-ridden airline company says it will split into two divisions. It says it will privatize its domestic money-losing airline. But it will create a new, publicly traded-company which will run its international division and its cargo business.