Computer software giant Microsoft will invest US$10 million for a 5 percent stake in Thrunet, a Korean high-speed Internet access provider.
Kim Jong-Kil, president of Thrunet, said October 7 that the company has
signed an agreement with the American computer software giant in
connection with the projected investment.
Thrunet and Microsoft reached the investment agreement after a
year-long negotiation. Next month, Microsoft will make an additional investment in Thrunet, which is expanding its high-speed Internet access service across Korea.
“The capital from Microsoft will be used to build our
telecommunications network in time for the planned extension of high-speed Internet services to cover the entire country next year, in addition to develop multimedia contents and other services,” Kim said.
Under the agreement, Microsoft will acquire 1.4 million shares, or 5%
stake in Thrunet, at 8,500 won (about US$7.00) per share, thus becoming the third largest shareholder of the company after Trigem Computer (12.5%) and Korea Telecom (9.5%).
Some analysts said that the stock price is excessively lower than the
Korean ISP’s market price, which is currently traded at about 30,000 won to 40,000 won per share in the over-the-counter market.
They also said that Thrunet, which is now preparing for listing of the
company on the NASDAQ, the OTC market, intends to strengthen its
position in the stock market by attracting investment from global giant such as Microsoft even at lower price than its market value.
Kim of Thrunet said, “Our work for listing on the NASDAQ is now
progressing very smoothly, and we expect that we will soon be able to officially announce the listing on the NASDAQ market.”
Thrunet has launched the Internet access service through the nation’s
cable TV network last July, offering the service to nearly 110,000 subscribers in Seoul, Pusan and five other major cities throughout the country.