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PCCW seeks US$1.3b from trust listing
Source: Bloomberg News |
September 27, 2011, Tuesday
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Print Edition
Print Edition
PCCW Ltd, Hong Kong's biggest phone company, said yesterday it may raise more than HK$10 billion (US$1.3 billion) from the proposed listing of its telecommunications business trust to repay debt and fund investments.
PCCW may sell 36.7 percent of the units in HKT Trust in an initial public offering to raise the money, and the total may be boosted by HK$1.6 billion if the over-allotment option is exercised, it said in a statement on Sunday. The planned spinoff is "subject to market conditions," PCCW said.
Chairman Richard Li, son of Hong Kong's richest man Li Ka-shing, expects to lure investors to Hong Kong's first business trust by offering to pay out a higher proportion of the income from PCCW's businesses including fixed-line and broadband Internet. PCCW's announcement comes amid a rout in global stock markets that has prompted companies, including Sany Heavy Industry Co to delay share sales.
"Given the state of the markets, there is a risk that the listing may not go ahead as planned," said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. "A lot of investors have factored in a successful spinoff into PCCW's share price."
PCCW fell 6 percent, the biggest drop since August 5, to close at HK$3.08 in Hong Kong yesterday. The stock has declined 10 percent this year, while the Hang Seng Index has tumbled 24 percent.
The trust listing will only proceed if the pricing of the offer is in the interests of PCCW, the firm said. Anita Choi, a PCCW spokeswoman declined to elaborate.
PCCW's fundraising goal is below an estimate by Macquarie Group Ltd in June.
PCCW may sell 36.7 percent of the units in HKT Trust in an initial public offering to raise the money, and the total may be boosted by HK$1.6 billion if the over-allotment option is exercised, it said in a statement on Sunday. The planned spinoff is "subject to market conditions," PCCW said.
Chairman Richard Li, son of Hong Kong's richest man Li Ka-shing, expects to lure investors to Hong Kong's first business trust by offering to pay out a higher proportion of the income from PCCW's businesses including fixed-line and broadband Internet. PCCW's announcement comes amid a rout in global stock markets that has prompted companies, including Sany Heavy Industry Co to delay share sales.
"Given the state of the markets, there is a risk that the listing may not go ahead as planned," said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. "A lot of investors have factored in a successful spinoff into PCCW's share price."
PCCW fell 6 percent, the biggest drop since August 5, to close at HK$3.08 in Hong Kong yesterday. The stock has declined 10 percent this year, while the Hang Seng Index has tumbled 24 percent.
The trust listing will only proceed if the pricing of the offer is in the interests of PCCW, the firm said. Anita Choi, a PCCW spokeswoman declined to elaborate.
PCCW's fundraising goal is below an estimate by Macquarie Group Ltd in June.
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