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New Tel up on China pact
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January 4, 2000: 1:08 p.m. ET
Aussie telecom shares soar 310 percent on news of Internet deal with Xinhua Ltd.
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NEW YORK (CNNfn) - The American depositary receipts of New Tel Ltd. rocketed more than 310 percent Tuesday after the telecom-services provider announced a Internet pact with a government-owned enterprise in China.
In Nasdaq trading Tuesday afternoon, ADRs of Australia-based New Tel (NWLL) rocketed up 25-25/32 to 34, making it the top percentage gainer on the exchange, on volume of 8.2 million. The ADRs jumped as high as 52 earlier in the session.
Word of the alliance emerged late Monday after Harry Sorensen, New Tel chairman and CEO, told shareholders the company has lined up with Xinhua Ltd., a Chinese government-owned firm, to create a Chinese- and English-language Net portal and a Chinese Internet-service provider.
"This is an exciting opportunity,” said Sorensen during the meeting. "Through our association with key Chinese government businesses, we will be uniquely positioned to access a market that is forecast to be worth over US$12 billion by 2002."
At first, the portal content will be provided by 18 Chinese government ministry Web sites with New Tel owning between 35 and 50 percent of each site, the company said.
New Tel shareholders also agreed to issue to Xinhua 3 million New Tel shares, the company said. New Tel was formed in July 1999 to focus on the telecommunications needs of Asia, especially China.
The company already has a joint venture with Xinhua to provide telecom service between China and Australia. 
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