Bloomberg News reported yesterday that Europe's largest consumer-electronics maker had purchased the stake, quoting Philips' spokesman Andre Manning. However, Sean Ren, communications manager of Philips Electronics China, said he had not yet received any formal details of the deal.

Cui Shaojie, TCL's spokesperson, told Shanghai Daily in an earlier interview that the Guangdong-based company had been in negotiations with Philips that could lead to a capital infusion program.

The equity investment of Philips in TCL is not a surprise in the domestic household appliance community, however, as the two parties had already formed a partnership last year.

In August, TCL signed an agreement with Philips under which the Dutch giant got access to TCL's sales channels in five Chinese provinces including Guizhou, Jiangxi, Anhui, Shanxi and Guangxi Zhuang Autonomous Region.

The deal allowed TCL to become Philips' sole television product sales agent in those areas.

In a move to improve its global profile, TCL said it was interested in selling further stakes in the company to "overseas strategic investors."

Last April it sold a combined stake of about 18 percent to Toshiba Corp., Sumitomo Corp. and Hong Kong's Nam Tai Electronics Inc. and Gold Peak Industries (Holdings) Ltd.

Li Dongsheng, president and chairman of TCL, said at the time that some of the company's 59 percent stake would be reserved for overseas investors.

Currently, the Huizhou City government holds 41 percent of the company while another 25 percent is in control of the company's management body.

TCL is also planning an initial public offering on the domestic bourse this year and has hired China International Capital Corp. to arrange the sale.

The television maker expects its revenues to reach 39.8 billion yuan (U$4.8 billion) this year, compared with 30 billion yuan last year. Profits are expected to be double that of last year, reaching 1.8 billion yuan.

(Shanghai Daily January 30, 2003)