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Pac Century Invests $129 Million in SoftNet

Pacific Century CyberWorks (PCCW) has taken a 23 percent stake in Nasdaq-listed SoftNet Systems, Inc. with a US$129 million investment.

Hong Kong-based PCCW is a subsidiary of Richard Li's Pacific Century Group, which intends to offer satillite and cable Internet services to 110 Asian households. PCCW bought 5 million shares in SoftNet, one of the top three largest broadband Internet providers over cable in the U.S.

The two companies also announced a joint venture, called Pacific Century SoftNet, to collaborate on broadband Internet, cable modem and satellite projects using technologies, products and services of both companies.

To fund the investment in SoftNet, PCCW raised US$500 million (HK$3.87 billion) in yesterday's placement of 63 million shares on the Hong Kong Stock Exchange.

The JV will leverage SoftNets experience in the U.S. to accelerate the build out of PCCWs targeted cable operators.

Moroever, the venture will explore the delivery of PCCWs converged Internet and Video service to SoftNets potential reach of 3.4 million homes.

The JV will also market SoftNets Intellicom VSAT capability to service providers and businesses in PCCWs regional service area.

"SoftNet has demonstrated its capabilities in the U.S. We believe SoftNet has significant expertise that will enable the rapid upgrade and deployment of 2-way cable broadband systems throughout the Asian service area," said Richard Li, PCCWs chairman.

"The investment by PCCW and our Joint Venture represents a vehicle to rapidly enter a very large Asian market," said Lawrence B. Brilliant, SoftNets chairman and CEO.

"Richard Li and his management team have a proven track record including the creation of Star TV," added Brilliant. "Their reputation with Asian cable operators will allow us to rapidly deploy PCCWs converged Internet and Video service."

The Pacific Century Group was established in October 1993 with proceeds from the sale of STAR TV, the first pan-Asian satellite television network, operating in more than 50 countries, to News Corp.

Pacific Century CyberWorks, the Groups technology flagship has Intel (12%) and CMGI (4.9%) as its strategic investors. Pacific Century is also the sole partner with the government of Hong Kong in the approximately US$1.6 billion Cyber-Port project.