Hutchison to assume GBP1.5 billion worth of UK unit’s debt

9 Mar 2004

Hong Kong-based shipping-to-retail conglomerate Hutchison Whampoa says it is ready to buy around GBP1.5 billion in loans relating to its UK third-generation subsidiary, Hutchison 3G UK (H3G), on the proviso that it is able to negotiate a more favourable repayment schedule. The sum is part of the total GBP2.462 billion of loans lent by banks in 2001 which would have matured this March had Hutchison not extended the period by twelve months at 2.25% above LIBOR – the widely used benchmark for short-term interest rates. The Hong Kong company, which owns an 80% stake in H3G is hopeful that banks will agree to reduce the interest rates to reflect the lower rates available in today’s market. Its UK operation, which operates under the 3 banner, has been the target of sustained criticism from investors and analysts who accuse it of having failed make an impact thanks to a string of delays and handset shortages.