Hutchison Telecom Seeking Loan Following Spin-Off
Published on: 13th Apr 2009
Note -- this news article is more than a year old.
Hutchison Telecom is reported to be in talks to secure a HK$5.5 billion (USD710 million) loan to be injected into the company when it is spun off from its parent, Hutchison Whampoa. Sources told the South China Morning Post that at least five lenders had shown "strong interest" in joining the loan because of their good relationship with the borrower
"Hutchison Telecom hasn't set any target for the loan because it depends on how much the banks are willing to commit," said a banker who specialises in syndicated loans.
Some of the funding is understood to be earmarked for repaying existing debt, but most of it will be used for working capital.
Hutchison Whampoa announced last month that it will be spinning off its Hong Kong holding company, HTHKH - which includes the landline and mobile operations in both Hong Kong and Macau. The company said in a statement that it believes that the Distribution and the Listing will unlock the value of HTHKH, a cash-generating asset of the Company and be beneficial to the Company and its shareholders as a whole.
Dennis Lui, Chief Executive Officer of Hutchison Telecom said at the time: "Our Hong Kong and Macau operations have been generating solid cash flow and profitability to the Group, yet their contribution and value are unrecognised. From this initiative the individual values of HTHKH and Hutchison Telecom with its remaining operations will be better recognised and reflected by their respective public market valuations.
On the web: South China Morning Post