Intel to take up stakes in WiMAX licensee Vmax
Irene Chen, Taipei; Steve Shen, DIGITIMES [Thursday 23 October 2008]
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.