Hutchison Telecom Sells 51% Stake in Israeli Mobile Network

Hong Kong registered Hutchison Telecom has announced the long expected sale of its Israeli subsidiary, Partner Communications. The sale of Hutchison's 51% stake is to the local handset distributor, Scailex Corp for approximately US$1.38 billion.

The purchase price is comprised of cash of approximately US$1,081 million and a secured debt instrument of US$300 million.

Canning Fok, Chairman of Hutchison Telecom said: "This transaction brings to realisation the significant value that we have created in Israel. We are proud to have built Partner into a respected and valuable company and we believe this is the right time to monetise the gain from our investment for the benefit of the Company and its shareholders. I thank the management team and all the staff at Partner for their dedication and hard work throughout."

The transaction is expected to close in the fourth quarter of 2009 conditional on Israeli regulatory approvals and Hutchison Telecom's shareholders' approval. Upon completion of the transaction, the Company is expected to realise an estimated gain before tax of approximately US$1 billion.

Going forward, Hutchison Telecom will continue its strategy of focusing on developing its existing operations in Indonesia, Vietnam and Sri Lanka.

Scailex has not made a statement regarding the purchase at the time of going to press, but has previously indicated that it would be seeking an outside investor to help fund the purchase.

Of the remaining shares in the company, 43.4% is listed on the local stock exchange and 5.3% is held by the founding shareholders.

Posted to the site on 12th August 2009