Chinese state-owned Citic Telecom is considering raising debt to fund its US$1.16bn acquisition of Macanese operator CTM.
Citic currently holds 20% of CTM, but agreed to increase that to 99% last month, striking deals with CWC and Portugal Telecom to…
Chinese state-owned Citic Telecom is considering raising debt to fund its US$1.16bn acquisition of Macanese operator CTM.
Citic currently holds 20% of CTM, but agreed to increase that to 99% last month, striking deals with CWC and Portugal Telecom to buy their stakes.
In a regulatory filing with the Hong Kong Stock Exchange Citic said it may issue US dollar-denominated guaranteed bonds and put the proceeds towards financing the acquisition of stakes in CTM.
It has mandated Deutsche Bank, Standard Chartered Bank and UBS as joint bookrunners and joint lead managers for the proposed issue.
Today the company’s share price rose by almost 6% after the announcement.
The Hong Kong-based telco also said it had commitment letters from banks and financial institutions, including an affiliate of one of the bookrunners, to provide loan facilities to be used in connection with the acquisitions.
When the CTM takeover was announced, Citic said it would fund the purchase with cash and new bank loan facilities. The Chinese state-backed telco said it had obtained commitments on certain funds for short and long-term loan facilities from a syndicate of banks to cover all of its funding requirements. It said it may consider refinancing part or all of the facilities at a later date through a rights issue and/or a bond issuance.
Barclays is Citic’s lead financial adviser on the acquisition of the CTM stakes, with Citic Securities Corporate Finance also advising on finance.
CTM has a monopoly on fixed-line and broadband services in gambling haven Macau, with its enterprise unit serving the region’s numerous casinos. It also offers mobile telephony. Macau’s government holds a 1% stake in the operator.
