PCCW shares surge on sale of UK broadband business to CK Hutchison
The share price of Hong Kong telecommunications company PCCW surged after it announced the sale of its British broadband internet business to CK Hutchison Holdings for 300 million pounds (HK$2.92 billion) on Monday.
PCCW’s share price at one point rose as much as 2.3 percent on Tuesday on the Hong Kong bourse to HK$4.85 during morning trading, its best performance since October.
The stock closed at HK$4.84, up 2.11 per cent.
PCCW, controlled by Richard Li Tzar-kai, announced on Monday night that it has entered into an agreement to sell its investment holding company, Transvision, to Three UK, a wholly-owned subsidiary of CK Hutchison, which is controlled by Richard Li’s father and Hong Kong’s richest man Li Ka-shing.
Transvision’s only material asset is UK Broadband, which conducts its broadband business in the UK under the “Relish” brand. UK Broadband’s principal assets are licences for radio frequency spectrum, its wireless networks and related systems, according to the filing to the Hong Kong Stock Exchange late on Monday.
PCCW said that the sale was to focus its resources and efforts on its main businesses, such as media.
“In particular, the cash received from the transaction can be used in developing businesses such as over-the-top services and free TV services which are in their investment stages”, the company said in the filing.
For the financial year ended December 31, 2016, Transvision reported an unaudited, consolidated net loss after taxation of HK$224 million.