Hutchison Whampoa has called on five investment banks to arrange the listing of its Italian 3G mobile unit on the Milan stock exchange in a deal that can be worth more than Euro2.5 billion ($23.89 billion). The initial public offering is expected to generate more exceptional gains for the group to cover 3G losses, which may run to $20 billion this year, analysts say. A banking source told the South China Morning Post yesterday that Goldman Sachs, HSBC, JP Morgan Chase, Merrill Lynch and Morgan Stanley had been mandated to arrange the offering. Hutchison is planning to sell 25 per cent of the 3G unit to institutional and retail investors. Apart from the investment banks, three Italian banks would also be involved in the retail portion of the share offer, the source said. The listing is likely to be in the fourth quarter. According to an Italian newspaper report, Lehman Brothers recently put the value of Hutchison 3G Italia at Euro10.5 billion, of which Euro5.9 billion is debt. Since Hutchison's management has previously said it will not sell its Italian 3G unit below book value, and assuming the unit's valuation will reach Euro10 billion by the time of the float, selling 25 per cent of the firm may mean that the deal can be worth more than Euro2.5 billion. Credit Suisse First Boston (CSFB) analyst Peter Hilton said in a report the conglomerate could earn $10 billion in exceptional gains for every Euro1 billion premium it could add to the unit's book value. CSFB had previously forecast 3G Italia's book value to reach Euro7 billion by the end of this year. Italy has always been Hutchison's fastest growing 3G market of the eight in which it has launched. It had signed up 3.56 million customers by the end of March, who on average spent Euro47.17 per month for the mobile service. This compares with Euro29 recorded by Italy's biggest mobile operator, TIM, and Euro29.90 by Vodafone Group, according to reports. CSFB said the listing could attract some interest from the capital market, as it would be the first pure 3G play on the Italian stock market which could guarantee the issuer some valuation premium. Hutchison has said its 3G business will break even in earnings before interest, taxes, depreciation and amortisation by the end of this year, after a net loss of $25.32 billion last year. That loss almost wiped out the group's gains from non-telecommunications businesses, but it was able to record a net profit of $16.13 billion, thanks to $19 billion from the disposal of assets and by an accounting change. Meanwhile, Hutchison will record a $9.4 billion accounting profit in the second half, after completing a 35 per cent stake buyout of its UK 3G unit from Royal KPN and NTT DoCoMo earlier than scheduled and at 10 per cent of the price the two former shareholders paid. Some analysts have said that the company would need an additional $1 billion to $2 billion in exceptional gains to get the group's net profit this year to the same level as last year.