Hong Kong Hutchison To Focus On U.K., Italy 3G Development
Monday January 8 6:47am
Source: Dow Jones
HONG KONG -(Dow Jones)- Hutchison Whampoa Ltd. (H.HUW) will focus on the development of its third-generation telecommunications business in the U.K. and Italy this year, group managing director Canning Fok Kin-ning told reporters Monday at a press conference.
Hutchison, through a 51%-stake in Andala, won a 3G license in Italy last year. Prior to that, a Hutchison-controlled group won a U.K. license in April. But Hutchison then sold a 35% stake in the consortium to Royal PTT Nederland NV (KPN) and Japan's NTT DoCoMo Inc. (J.NTX).
As reported, the Hong Kong conglomerate said it will issue a US$2.5 billion bond that is convertible into shares in Vodafone Group PLC (VOD).
It has a 3.47% stake in the U.K. telecom operator, and the US$2.5 billion convertible bond represents 0.87% of the total issued share capital.
Sitting on a cash and equity investment of HK$200 billion, analysts see Hutchison's move as a step in the disposal of its Vodafone stake.
However, Fok said "it is just a means of financing" for the company. "We've saved between HK$1 billion to HK$2 billion," with the convertible bond by not borrowing the money at the prime rate, he said.
Fok didn't say whether Hutchison will make further provision for Vodafone's shares after it made a HK$30 billion provision on Vodafone in the six months to June 30, 2000. This came amid a downturn in telecommunications shares.
Banks arranging a US$4.7 billion syndicated loan for Pacific Century CyberWorks Ltd. (PCW) increased the interest paid on the loan amid a lackluster response to the issue. However, Fok said he hasn't heard anything from bankers that they will increase interest payment for the GBP3 billion loan put together by seven banks for its third-generation wireless unit in the U.K.
-By Sonia Tsang, Dow Jones Newswires; 852-2802-7002; sonia.tsang@dowjones.com
(This story was originally published by Dow Jones Newswires)
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