PCCW to control telecoms unit following IPO
PCCW wants to do the spin-off listing of its telecommunications unit in Hong Kong.
The proposed listing would be Hong Kong's first business trust IPO, and would only happen if rules were changed to support such an endeavour. Only property-trust listings are allowed in the city, while Singapore permits various trust floats.
In a filing with the Hong Kong stock exchange last night, PCCW said its 'preferred option would be to list in Hong Kong and proposals which have been to submitted to the [local] regulators for consideration proceed on the basis of working within the existing Hong Kong regulatory framework'.
PCCW, the largest fixed-line network operator in Hong Kong, reiterated it was still in discussions with the local stock exchange and the Securities and Futures Commission regarding the possibility of listing a business trust in the city.
A business trust combines elements of a company with elements of a unit trust. It does not have a separate legal identity and is controlled by a so-called trustee manager, typically an affiliate of the company establishing the trust.
Investors hold units rather than shares, and their liability is limited to the amount they paid for those units.
PCCW said it was seeking to sell a minority stake in the units of such a business trust. 'The company would intend to retain a controlling stake in the telecommunications business on a long-term basis, by retaining a majority of the listed units in the business trust and control of the trustee manager,' it said.
The company would also continue to consolidate the results of the telecoms business. IPO funds would be used by PCCW 'to strengthen the company's balance sheet and for investments in future growth'.
China Unicom, the other controlling shareholder of PCCW after chairman Richard Li Tzar-kai, did not oppose the spin-off plans, according to Unicom president Lu Yimin, who spoke on the matter at a separate press conference yesterday.