Hutchison Telecom sells fixed-line network business for US$1.9b

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The company says it will use the funds raised to invest in its mobile network operations

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Hutchison Telecom says proceeds from the sale of its fixed-line business will be used to invest in the mobile business. Photo: Edward Wong

Karen Yeung

Published: 9:15pm, 30 Jul 2017Updated: 8:57pm, 3 Jul 2018

Hutchison Telecommunications Hong Kong has agreed to sell its fixed-line network business to Asia Cube Global Communications for HK$14.5 billion (US$1.86 billion) in cash, raising funds to invest in its mobile operations.

Asia Cube Global is wholly-owned by a fund managed by I Squared Capital, which is an independent global infrastructure investment manager focusing on energy, utilities, and transport in markets including for North America and Europe.

The sale by the city’s second largest mobile network operator of its entire interest in Hutchison Global Communications (HGC) is expected to close around October this year, according to a Hong Kong stock exchange filing on Sunday.

It marks the third sale of a major fixed-line network business in Hong Kong since last year.

Hutchison Telecom, a unit of tycoon Li Ka-shing’s CK Hutchison Holdings, has seen its share price climb since mid-May, hitting a 21-month closing high of HK$3.04 on July 18, amid speculation over the bidding for the HGC assets. Its shares closed at HK$2.81 on Friday.

Hutchison Telecom has been increasingly focusing on expanding the mobile business via Three Group. Photo: Bloomberg

For a period of 12 months after the deal closes around October, Hutchison Telecom would provide certain transitional services to HGC, the operator said in its filing.

The deal with Asia Cube Global also provides that for a period of 36 months after the closing, Hutchison Telecom will not operate fixed-line network, Wi-fi or data centre services in Hong Kong.