eAccess to increase ACCA stake and make unit a subsidiary

1 Aug 2008

Japan’s fourth largest ADSL broadband internet provider by subscribers, eAccess, has revealed it is looking to increase its stake in fifth-placed counterpart, ACCA Networks, and then convert the unit into an eAccess subsidiary. Once completed, the enlarged entity will command 22% of the domestic ADSL market leapfrogging its rivals to become the second biggest provider there, behind Softbank BB Corp. It is understood that through a private placement of shares on 15 August, eAccess intends to spend JPY7.4 billion (USD68.7 million) to increase its interest in ACCA from 15.04% to 45.32%. Following the transaction, ACCA Networks will accept the appointment of a majority eAccess board at an extraordinary shareholders meeting scheduled for 1 October. Going forward, all eAccess ADSL facilities, operations and maintenance will be concentrated at ACCA and on 1 September 2008, eAccess plans to sell its ADSL infrastructure to the unit for JPY3.3 billion. eAccess says the restructuring will yield cost savings of JPY7 billion over five years.