Hutchison spins off emerging mobile businesses to compensate for 3G losses

30 Mar 2004

Under pressure Hutchison Whampoa is looking to offset the widening losses of its 3G operations by spinning off its telecoms businesses in emerging markets into a new subsidiary to be listed on the Hong Kong stock exchange. The group says it will retain control of the newly-formed Hutchison Telecommunications International, which will oversee its fixed and mobile units in Hong Kong, alongside mobile operations in Ghana, India, Israel, Macau, Paraguay, Sri Lanka and Thailand; the majority of the businesses are joint ventures. The new company will not include Hutchison’s Australian telecoms businesses nor its 3G assets in western Europe. Hutchison has filed its application for an initial public offering (IPO) and is believed to be seeking around USD1 billion from the flotation. The bulk of the money raised will be put towards the group’s USD20 million-plus bill for its 3G operations in Europe and Asia. Hutchison said that the formation of the new company would not affect a planned IPO of its 49%-owned Indian mobile business, Hutchison Essar.