Hong Kong-based City Telecom has announced it would dispose of its telecom businesses in Hong Kong and Canada in order to focus on its television broadcast operations.
The buyer is Metropolitan Light Company, an affiliate of private equity firm CVC…
Hong Kong-based City Telecom has announced it would dispose of its telecom businesses in Hong Kong and Canada in order to focus on its television broadcast operations.
The buyer is Metropolitan Light Company, an affiliate of private equity firm CVC Capital Partners, which has agreed to pay HK$5.012bn (US$645.5m) for the assets.
These include broadband internet and long-distance phone services.
To pay for the assets, Metropolitan has received equity funding worth HK$2.65bn (US$340.8m) from CVC Asia Pacific and debt commitments in the amount of HK$2.5bn (US$322m) from JP Morgan and Standard Chartered.
Proceeds from the transaction will be partly returned to City’s shareholders via a special dividend of approximately HK$2bn, or HK$2.50 per share.
The remainder of the proceeds “will be retained to fund the continuing development and expansion of the multimedia business,” City Telecom stated in a notice to the Hong Kong Stock Exchange.
The transaction requires regulatory and shareholder approvals.
