Corrected: UPDATE 2-Hutchison Telecom shares jump on $1.9 bln deal to sell fixed-line unit

Hutchison Telecommunications Hong Kong Holdings

08/08/2017 07:37

(Repeats story, with no changes to text) 
    * Li Ka-Shing's Hutchison sells unit to I Squared Capital 
    * Hutchison Telecom sees profit of HK$5.8 bln on the sale 
    * Shares jump almost 15 percent to 21-month high 
 
    By Kane Wu and Elzio Barreto 
    HONG KONG, July 31 (Reuters) - Hutchison Telecommunications 
Hong Kong Holdings Ltd  0215.HK  shares jumped almost 15 percent 
when it started trading on Monday, a day after it announced the 
sale of its fixed-line business for about $1.9 billion. 
    Hutchison Telecom, a unit of Hong Kong's richest man Li 
Ka-Shing's CK Hutchison Holdings  0001.HK , said in a filing on 
Sunday that it had agreed to sell its fixed-line telecoms 
business to I Squared Capital for HK$14.5 billion in cash. 
    Proceeds from the sale of Hutchison Global Communications 
(HGC), which provides fixed-line phone services as well as Wifi 
all around Hong Kong, will be used for investment into mobile 
phone services and for working capital. 
    The price represents about 12 times HGC's earnings before 
interest, taxes, depreciation and amortization, a source close 
to the deal told Reuters. 
    Hutchison Telecom said it expected to make a profit of 
HK$5.8 billion ($742.71 million) on the sale of HGC. 
    Hutchison Telecom shares have risen nearly 23 percent since 
May 16, when it acknowledged media reports about a potential 
sale of the fixed-line business.  urn:newsml:reuters.com:*:nFWN1II015 
    The HGC unit drew interest from several companies, including 
HKBN Ltd  1310.HK , SmarTone Telecommunications Holdings Ltd 
 0315.HK  and a consortium of private equity firms TPG Capital 
Management LP  TPG.UL  and MBK Partners.  urn:newsml:reuters.com:*:nL3N1K92BK 
    I Squared Capital won the deal partly because it will not 
face the same anti-trust scrutiny as some of the other bidders 
would, the source said. 
    TPG and MBK teamed up to buy Wharf T&T - Hong Kong's No.2 
fixed-line operator for businesses last October from tycoon 
Peter Woo's Wharf Holdings Ltd in a $1.22 billion deal. 
 urn:newsml:reuters.com:*:nFWN1CA0N1 
    The HGC deal is subject to shareholders' approval and is 
expected to close in October, Hutchison Telecom said in the 
filing. The value of the deal may be adjusted at the time based 
on debt, cash levels and other financial data. 
    CK Hutchison, which owns 66.1 percent of Hutchison Telecom, 
will vote all its shares in favour of the sale during an as-yet 
unscheduled extraordinary shareholders meeting.  
    I Squared has secured a HK$7.02 billion ($900 million) loan 
from Credit Agricole, Credit Suisse and Deutsche Bank to fund 
the HGC purchase, according to Basis Point, a Thomson Reuters 
publication. The three banks could not be immediately reached 
for comment.  urn:newsml:reuters.com:*:nRLP62378a  
    The firm, which invests in global infrastructure in energy, 
utilities and transport, is among potential buyers for Equis 
Energy, Asia's largest independent renewable energy producer 
valued at up to $5 billion, sources have said.  urn:newsml:reuters.com:*:nL3N1KG2LO 
    Hutchison Telecom said it appointed Deutsche Bank  DBKGn.DE  
and Goldman Sachs  GS.N  as financial advisers on the HGC 
transaction. Credit Suisse advised I Squared Capital on the 
transaction, according to another source familiar with the deal. 
    The sale comes as Hutchison's unit Hutchison Drei Austria 
announced on Friday an acquisition of landline-focused Tele2 
from its Swedish owner for 95 million euros ($111 million). 
 urn:newsml:reuters.com:*:nL5N1KJ296  
    Hutchison Telecom shares jumped almost 15 percent to a 
21-month high earlier on Monday, and were trading up 10.32 
percent at HK$3.10 apiece by 0526 GMT, versus the broader index 
 .HSI  that was up 1 percent. 
 ($1 = 7.8092 Hong Kong dollars) 
 
 (Reporting by Kane Wu and Elzio Barreto, additional reporting 
by Basis Point; Editing by Jane Merriman and Himani Sarkar) 
 ((elzio.barreto@thomsonreuters.com;)(852)(2843-1608; Reuters 
Messaging: elzio.barreto.thomsonreuters.com@reuters.net)) 
 
Keywords: HUTCHISON TELE SALE/ (REPEAT, CORRECTED, UPDATE 2