Bloomberg News

PCCW Said to Seek Up to $2 Billion in Business Trust Spinoff

June 09, 2011

(Adds trust history in third paragraph.)

June 9 (Bloomberg) -- PCCW Ltd. plans to raise as much as $2 billion by listing its telecommunications assets as a business trust in Hong Kong, two people with knowledge of the matter said.

The company, Hong Kong’s biggest phone carrier, has hired China International Capital Corp., Deutsche Bank AG and Goldman Sachs Group Inc. for the sale, said the people, who declined to be identified because the information is private.

PCCW, controlled by billionaire Chairman Richard Li, last week said Hong Kong Exchanges & Clearing Ltd. approved the company’s plan to list the business trust, after initially rejecting the proposal. The carrier said it may sell a minority stake of the trust, which will include the company’s “mature” operations including divisions that offer fixed-line, broadband Internet, and mobile-phone services.

Anita Choi, a spokesman at PCCW in Hong Kong, declined to comment.

Proceeds from the proposed offering will be used to reduce debt and for investment in faster-growing businesses, PCCW said on June 2. Falling revenue from sales of fixed lines had weighed on shares of PCCW, which have underperformed Hong Kong rivals including SmarTone Telecommunications Holdings Ltd. this year.

PCCW shares rose 0.3 percent to HK$3.12 in Hong Kong trading today, and have declined 9.3 percent this year, compared with the 69 percent gain in SmarTone, the mobile carrier controlled by the city’s leading real-estate company Sun Hung Kai Properties Ltd.

In April, PCCW said that the stock exchange’s listing committee had rejected the application for the business trust.

The Wall Street Journal reported on PCCW’s fund-raising plans earlier today.

--Editors: Richard Dobson, Abhay Singh

To contact the reporters on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net; Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net


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