This excerpt taken from the CHA 6-K filed Jun 21, 2007.
Reasons and benefits for the Strategic Agreement and the Supplemental Agreement
We note that with the background and its special role in the telecommunication industry, CCS is the few available provider in the market for the services that the Company requires in its operations.
As stated in the Letter from the Board in the Circular, by expanding the geographic scope of strategic cooperation with CCS, the Company will be able to realize the same benefits in the Additional Provinces as in the Existing Provinces of having CCS as the provider of the (i) services in connection with the design, construction, project supervision and management of communication engineering projects and (ii) facilities management and network maintenance services. In addition, the Group will also be able to benefit from the broader service network and enhanced servicing capability of CCS in the Enlarged CCS Service Areas resulting from its expansion. It is stated in the Letter from the Board in the Circular that the reasons and benefits for the Supplemental Agreement and for expanding the geographic scope of mutual strategic cooperation are the same as those for the Strategic Agreement as disclosed in the 2006 Announcement, and have been restated and summarized hereunder:
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
Having considered the above reasons and factors, there is no reason for us to doubt the commercial reasoning for entering into the Supplemental Agreement.