Li Ka-shing's flagship conglomerate, Hutchison Whampoa, and his namesake charitable foundation agreed yesterday to take control of debt- laden Scailex.
They will buy the company, the parent of Israeli mobile network operator Partner Communications, for a total consideration of US$125 million from Suny Electronics.
Hutchison said it arranged to buy a 50 per cent stake in Scailex through a subsidiary, Persall.
The Li Ka-shing Foundation, which invests in select projects worldwide, will purchase a 25 per cent shareholding in the Israeli company through its subsidiary, Kelburgh.
Their acquisition will again put Hutchison in charge of Partner after it sold the company in 2009 for US$1.38 billion to Scailex, the sole importer of Samsung Electronics mobile phones in Israel. When it bought Partner, Scailex had also received a US$300 million secured loan from Hutchison.
Hutchison, which runs 13 mobile networks worldwide, founded Partner in 1997 and launched its cellular operations in 1999. Partner, whose shares trade on both the Nasdaq in the United States and the Tel Aviv stock exchange, is the second-largest mobile network operator in Israel.
As part of Hutchison's takeover of the company, Scailex will sell its Samsung cellular handsets import, distribution and services business to Suny for US$100 million. Israeli businessman Ilan Ben-Dov controls both Suny and Scailex.
Hutchison said it had agreed to extend the repayment of its US$300 million loan to Scailex by three years, from 2014 to 2017, to enhance the Israeli company's financial position. Scailex has total debts of US$760 million, including US$460 million owed to undisclosed third parties.
Scailex said it would buy back about 50 per cent of its outstanding non-convertible bonds at 69 per cent of their total value.
Its acquisition by Hutchison and the foundation is conditional on approval from regulatory authorities and shareholders, the sale of the Samsung handset import business to Suny and the success of the bond buyback, according to Hutchison.
Once that deal is completed, Hutchison and the foundation intend to appoint Amikam Cohen to replace Ben-Dov as chairman of the board at Partner. Cohen had served as chief executive of Partner until 2007. He later became chief executive at Hutchison Water.
Hutchison said Cohen's experience 'will contribute significantly to Partner's ability to lead the Israeli telecommunications market'.
The number of mobile networks that Hutchison runs throughout the globe