Hong Kong telco says sale to fund manager I Squared Capital frees it up to focus on mobile.
Hutchison Telecommunications Hong Kong Holdings (HTHKH) on Sunday agreed to sell 100% of its carrier division Hutchison Global Communications (HGC) to fund manager I Squared Capital for HK$14.5 billion (€1.58 billion).
HGC provides wholesale and international telecoms, enterprise IT, and data centre services. It also offers residential fixed-line services in Hong Kong under the 3 Broadband brand. HTHKH said that offloading the unit will free it up to focus more on mobile.
"Through the transaction, HTHKH will receive substantial proceeds, which will enable HTHKH to continue to invest and strengthen its leading market position in the mobile business," the company said in a statement.
HTHKH offers mobile services in Hong Kong and Macau under the 3 brand. At the end of June, it served 3.3 million customers. It is owned by CK Hutchison, which also owns 3 Group, which offers 3-branded services in various European and Asian markets.
The buyer, I Squared Capital, is an infrastructure investment manager focused on energy, utilities, and transport, mostly in North America and Europe. HGC will become part of its Asia Cube Global Communications unit.
HTHKH said Sunday’s deal "will create value for its shareholders by unlocking the value of HGC, which has not been fully reflected in HTHKH’s share price in recent years."
The deal is subject to approval by HTHKH shareholders. CK Hutchison, which owns 66.09% of HTHKH’s shares, has already signalled its support.
The transaction is expected to close by October, after which, HGC will continue to provide fixed-line services to HTHKH.
HGC is one of numerous global carriers taking part in Total Telecom’s 20th annual Carriers World, which takes place at the Hilton Tower Bridge, London, on 26-27 September. Click here to find out more.