HTIL plays down concern over India listing
Hutchison Telecommunications International Ltd (HTIL) has dismissed concerns that Egyptian investor Orascom could derail its planned listing for its 61.8 per cent-held Indian mobile flagship Hutchison Essar.
HTIL plans to spin off Hutchison Essar on the Mumbai stock exchange in what is expected to be the biggest - and most likely only - share sale for HTIL's parent Hutchison Whampoa this year.
Indian media reported this week that Orascom, which holds a 19.3 per cent stake, could pose a security threat to India since the Middle Eastern mobile giant owns telephone companies in Pakistan and Bangladesh, and the listing could hit regulatory obstacles.
'Such security concerns would not derail Hutchison Essar's targeted listing plan. Orascom's investment in HTIL does not constitute any [security] violation,' said chief executive Dennis Lui Pok-man.
Hutchison Essar, which covers 16 of India's 23 licensed regions, has been valued at US$6 billion by a former shareholder, Indian private sector lender Kotak Mahindra.
HTIL this month consolidated 61.8 per cent from Hutchison Essar's profit - up from 53 per cent previously - after it restructured the unit earlier this month following Kotak Mahindra's sale of its 8.33 per cent to a joint-venture firm.
India is HTIL's top market out of its seven-market portfolio, accounting for 41 per cent of the group's revenue last year.
With total subscribers growing 59 per cent to 11.4 million, India's operating profit rose 87.2 per cent to $2.52 billion.
Yesterday, HTIL reported a worse than expected net loss of $768 million, up from a restated $30 million a year ago.
While operating profit grew 50 per cent to $2.24 billion from $1.49 billion a year ago, the loss from the sale of its Paraguay operations, and its need to account for a larger chunk of combined losses from other markets, compounded its losses. Total revenue rose 64.1 per cent to $24.35 billion.
Chief financial officer Tim Pennington said HTIL had budgeted $14.5 billion to invest in a global mobile network and planned to double capacity in India.
Hutchison, which holds 49.8 per cent of HTIL, has been relying on listing its units or asset disposals to lift earnings.