bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

PCCW is set to raise at least HK$478 million from the sale of its minority stake in MobileOne Asia (M1) next month, according to analysts.

However, the Richard Li Tzar-kai controlled company could raise as much as HK$728 million by selling its stake in Singapore's second-largest mobile company, which launched its first overseas roadshow in Hong Kong on Monday.

In what would be Singapore's largest initial public offering (IPO) in three years, M1 hopes to sell between 57 per cent and 70 per cent of its existing shares to raise up to S$1.11 billion (about HK$4.91 billion).

Shareholders in M1 - Singapore Press Holdings (35 per cent), Keppel Telecommunications & Transportation (35 per cent) and Great Eastern (30 per cent) - will sell their shares for between S$1.25 and S$1.52. The company has a total of 1.05 billion issued shares.

Great Eastern is 51 per cent controlled by Cable & Wireless, and 49 per cent by PCCW, which inherited the stake after taking over the former Cable & Wireless HKT in 2000.

PCCW has an effective interest of 14.7 per cent in M1.

A PCCW spokesman declined to comment on the IPO.

Based on the listing information, PCCW is entitled to about 15.43 million shares in M1, of which a maximum of 10.8 million can be sold in the IPO.

In the best scenario, PCCW could cash in HK$728 million, with the remaining 4.63 million shares to be sold after a 12-month lock-up period expired.

But it would cash in HK$478 million and have 6.63 million shares remaining if the shares were priced at the low end of the price range and the minimum amount of shares were sold.

'The proceeds are too small to have a big impact on PCCW,' JP Morgan Securities analyst Richard Wu said.

PCCW, which has a gross debt of US$4.2 billion, is expected to pay an annual interest expense of more than HK$2 billion this year.

PCCW, along with other M1 shareholders, placed the mobile operator on sale in April last year but no buyer has emerged. M1's valuation has been halved from the asking price of S$3 billion to the present high-end valuation of S$1.57 billion.

In the IPO, M1 will be sold at between nine and 11 times earnings for next year. In the first eight months of this year, M1's net profit was S$80.6 million, up 36 per cent on the same period of last year.

To lure investors, M1 has promised to pay out S$65 million, or about half its earnings, meaning a net dividend yield of between 4.1 and 5 per cent for this year. The dividend yield is comparable to the 4.4 per cent yield for China Telecom for next year.



PCCW to raise $478m from sale of M1 stake