Conglomerate PCCW said in a filing with the Hong Kong Stock Exchange that it expects the listing of its telecoms unit as a business trust to generate up to HK$10bn (US$1.28bn).
But the company added that the unit will need to achieve a minimum market…
Conglomerate PCCW said in a filing with the Hong Kong Stock Exchange that it expects the listing of its telecoms unit as a business trust to generate up to HK$10bn (US$1.28bn).
But the company added that the unit will need to achieve a minimum market capitalisation of HK$28.6bn (US$3.6bn) for the listing to go ahead.
Proceeds from the transaction are expected to be used for debt repayment. “If the net proceeds [are] HK$7.8bn (US$ 0.95bn) or less, the entire net proceeds will be retained by HKT and applied towards repayment of the telecommunications group’s debt,” PCCW explained.
“If the net proceeds exceed HK$7.8bn the entire amount of the net proceeds in excess of HK$7.8bn would be paid to CAS No. 1, a wholly owned-subsidiary of the company, for the settlement and cancellation of the promissory note to be issued to it under the pre-IPO restructuring as partial consideration for the acquisition of the telecommunications group,” it added.
PCCW also said in the filing that it would retain between 55% and 70% of the business trust following the listing, scheduled to take place in Q4 this year.
The disposal of a minority stake will therefore allow Richard Li, media tycoon and chairman of PCCW, to raise money without giving up control of the fixed-line operations.
This is the first time that Hong Kong allows the listing of a business trust, which combines elements of a company with those of a unit trust, and is operated through a trustee manager. Investors in such a trust hold units rather than shares.
