Hutchison keen to offload Vodafone, Telekom holdings
( 2001-08-24 10:55) (7)
Hutchison Whampoa, the Hong Kong conglomerate at the centre of storms engulfing Vodafone and Deutsche Telekom, wants to sell its remaining shares in the companies to raise cash for its own European mobile phone ventures.
Both telecom operators' market valuations have fallen sharply on fears that shares issued to Hutchison in their respective purchases of Mannesmann and Voicestream would return to flood the market.
Hutchison revealed on Thursday to Hong Kong analysts that it is keen to sell its 900 million Vodafone shares and 220 million Deutsche Telekom shares to cover debts assumed by third-generation mobile phone subsidiaries launched in Italy and the UK.
These subsidiaries have struggled to raise independent financing from banks concerned about the outlook for Europe's mobile phone market. Hutchison is widely expected to underwrite some debt needed to build its 3G network in Italy. It will also consolidate much of the UK￡2.6 billion (US$3.7bn) of non-recourse debt and vendor financing secured in the UK on to its own balance sheet.
Canning Fok, Hutchison's group managing director, said the company had been in discussions with Deutsche Telekom to resolve the issue of Hutchison's overhang in its remaining stake in the company. Fok admitted that Hutchison had sold 35.5 million shares of Deutsche Telekom on August 7 through what he described as a forward transaction rather than a direct sale.
Hutchison executives are also understood to have told analysts at a briefing that they are keen to raise their cash levels by selling its remaining Vodafone stake.
Vodafone, which saw its share price fall after Hutchison disposed of two earlier stakes through convertible bonds, said: "It is in the interests of both companies to co-operate to ensure an orderly disposal if that is what (Hutchison) decide to do."
Hutchison is also at the centre of a controversy over bonuses agreed for Mannesmann executives at the time that the German company agreed to accept Vodafone's hostile bid.
Li Ka-shing, Hutchison chairman, appeared undaunted by the problems in Europe and said that the company might pick up another 3G mobile licence there if the opportunity arose.
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