Thursday, October 23, 2008

Intel to take up stakes in WiMAX licensee Vmax

Intel is expected to announce at the end of this month its plans to make equity investment in Taiwan-based Vmax Telecom, a WiMAX licensee for the northern region of Taiwan, according to sources close to the deal.

The planned investment in Vmax is part of Intel's commitment signed in a MOU with Taiwan's Ministry of Economic Affairs (MOEA) in 2007 for investments and procurement of WiMAX products of up to US$500 million within five years.

Intel CEO Paul Otellini is scheduled to visit Taiwan on October 30 and will announce the investment plan jointly with related parties, according to a Chinese-language Economic Daily News (EDN). Otellini is also expected to sign a new MOU with the MOEA for cooperation in software products, EDN added.

Vmax plans to soon increase its capital from NT$1 billion to NT$2 billion, with Intel likely to take up a portion of new shares issued under the capital expansion project, said the sources.

However, Intel is also likely to limit its equity investment in Vmax to NT$400 million (US$12.1 million), or 20% of the licensee's expanded paid-up capital, on concerns of accounting practice, the sources noted.

source

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