01 August, 2017
The investment group I Squared Capital will buy Hutchison Global Communications (HGC) from Hutchison Telecommunications Hong Kong Holdings (HTHKH) for HKD 14.5 billion (EUR 1.58 billion).
Asia Cube Global Communications Ltd, a company wholly-owned by I Squared Capital, an infrastructure-focused private equity firm in the United States, will be the buyer among competitors including a consortium consisting of TPG Capital and South Korean billionaire Michael Kim's MBK Partners, the Financial Times reported.
HGC is a leading fixed-line service provider to fixed and mobile carriers, OTT service providers, enterprises and data centers in Hong Kong and around the world.
In its half-year results ended 20 June, 2017, HGC reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of HK$656 million, while in the previous corresponding period in 2016, HCG reported HK$669 million in EBITDA.
The agreement follows the sale of Wharf Holdings's (九龍倉集團) Hong Kong Internet provider for US$1.2 billion to a private-equity buyer group a year ago.
"It's a premium asset with very long-term contracts with mobile operators and large businesses", Bhandari said.
Subject to shareholder approval, it is expected to close in October.
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.
Hutchison Telecommunications shares rose 6.8% to HK$3.00 at the close Monday in Hong Kong, after earlier jumping as much as 15%, the most intraday since January 2011. The three banks could not be immediately reached for comment.
I Squared Capital is an independent global infrastructure investment firm focusing on energy, utilities, and transport.
Hutchison Telecom shares jumped nearly 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 that was up 1 percent.
The firm's share price has jumped almost 23 per cent since it acknowledged media reports about a possible sale of HGC in May.
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