Talk of unit's sale lifts Hutchison Telecom
Hutchison Telecommunications International shares rose to a new high yesterday on speculation that its Indian mobile business would be sold soon to private equity funds for more than HK$100 billion.
The shares, which have gained more than 66 per cent this year, rose 1.86 per cent to close at HK$18.64.
One rumour said Reliance Communication, India's second-largest mobile operator, would partner US-based private equity firm Blackstone Group to offer at least US$14 billion for Hutchison Essar. Hutchison Telecom holds a 67 per cent stake in Hutchison Essar.
Hutchison Telecom's spokesperson declined to comment.
Rumours that Hutchison Telecom was selling its Indian business spread earlier this month with talk that US-based private equity fund Texas Pacific and Blackstone were joining hands in bidding more than US$80 billion for the unit.
'Hutchison does want to sell its Indian assets for a higher valuation,' said an analyst who declined to be named, adding that the market was concerned that the Indian stock market might slump next year.
Hutchison Telecom had long been planning to spin off its Indian mobile business for a listing. The plan is pending due to various regulatory issues such as Indian restrictions on foreign holdings and market sentiment.
The Indian business is the major revenue stream of Hutchison Telecom, accounting for 45 per cent of the group's HK$15.6 billion turnover for the six months ended June this year. It recorded 51 per cent growth over the same period last year.
The customer base for Hutchison Essar jumped 54 per cent or 6.1 million in the first half to 17.5 million. Earnings before interest, tax, depreciation and amortisation rose 47 per cent to HK$2.3 billion.