Hong Kong-based conglomerate Hutchison Whampoa has agreed to pay US$125m to acquire a 75% stake in Israeli holding company, Scailex, which owns 44.5% of mobile operator Partner Communications.
Hutchison founded Partner in 1997 but sold it to…
Hong Kong-based conglomerate Hutchison Whampoa has agreed to pay US$125m to acquire a 75% stake in Israeli holding company, Scailex, which owns 44.5% of mobile operator Partner Communications.
Hutchison founded Partner in 1997 but sold it to Scailex, now burdened by debts totalling about US$760m, in 2009 for US$1.38bn.
Hutchison said it will acquire the stake from Scailex’ parent company Suny Electonic via subsidiaries Persall and the Li Ka Shing Foundation, which will take on 50% and 25% shareholdings respectively.
As part of the transaction, Hutchison said it will sell its Samsung mobile handset business to Suny for US$100m, using the proceeds to help Scailex reduce debts. According to Hutchison, Scailex owes it US$300m and about US$460m to third parties.
In addition, Hutchison has agreed to extend the repayment date of Scailex’ US$300m loan by three years to 2017.
As an additional measure to improve its financial position, Scailex will also seek to buy back about half of its outstanding non-convertible bonds at a higher purchase price.
Hutchison’s stake increase is subject to the approval of the Israeli antitrust authorities, relevant shareholders, the sale of the Samsung mobile handset business and the successful repurchase of at least 50% of Scailex’ non-convertible bonds.
Upon completion of the transaction, Hutchison said it will appoint Amikam Cohen as chairman of Partner’s board, adding it is confident his telecoms expertise will enable him to make the company the market leader.
Scailex announced in February that it had hired Deutsche Bank and Lazard Freres to evaluate its future options, including the possible sale of its stake in Partner, which is Israel’s second largest mobile operator.
Hutchison has telecoms operations in 13 countries internationally. In early February the company agreed to acquire Orange Austria from France Telecom and private equity firm Mid Europa Partners for €1.3bn – a deal subject to regulatory approval. Last month, the company offered €2bn for Irish incumbent Eircom, but this was rejected.
