HKT to trim debt after CSL New World acquisition with HK$7.9b rights issue

HKT Trust and its operating arm HKT, which comprise the telecommunications assets under Richard Li Tzar-kai's PCCW, plan to reduce their debt load and refinance bank borrowings used in their latest acquisition through a rights issue totalling HK$7.9 billion.

Net proceeds from the proposed fundraising are estimated to reach HK$7.78 billion as qualified investors of HKT Trust - the first business trust listed in Hong Kong, in 2011 - would be able to buy 18 share stapled units for every 100 they already own at HK$6.84 per unit, according to PCCW and HKT group filings yesterday with the Hong Kong stock exchange.

The market, however, saw HKT Trust's shares fall 4.29 per cent to HK$8.25 on news of the equity financing initiative.

PCCW's shares also declined to finish at HK$4.22, down 0.71 per cent.

HKT Trust intends to issue 1.16 billion so-called rights share stapled units, priced at a 20.65 per cent discount from the closing price of HK$8.62 on Thursday.

It currently has 6.417 billion share stapled units in issue, of which 63.07 per cent is owned by PCCW.

The Communications Authority approved last month the HKT group's HK$18.8 billion takeover of rival CSL New World Mobility from Australian parent Telstra Corp and New World Development.