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Hutchison Whampoa proposes to privatise Hutchison Telecommunications
(Corporate IT Update Via Acquire Media NewsEdge) Hutchison Whampoa Limited (HWL) and telecoms services provider Hutchison Telecommunications International Limited (HTIL)(SEHK:2332)(NYSE:HTX) have jointly announced that an HWL Group company has requested the board of directors of HTIL to put forward a proposal to privatise HTIL by way of a Scheme of Arrangement under the Companies Law of the Cayman Islands.
The proposal will provide that each share of HTIL held by HTIL shareholders, other than those which are wholly owned by HWL, on a record date to be announced will be cancelled in exchange for HKD2.20 in cash.
The amount represents a 37% premium over the closing price on the day prior to the suspension of trading in the HTIL shares. Holders of HTIL American Depositary Shares (ADSs) will for each HTIL ADS receive the US dollar equivalent of HKD33.00 in cash before fees and taxes. The offeror has stated that the HKD2.20 amount will not be increased.
HWL noted that, following the sale by HTIL's subsidiaries of their interests in the India and Israel operations and the spin-off of its Hong Kong and Macau businesses. HTIL now has operations in four countries, none of which is amongst the top three operators in their respective markets and all of which generate negative cash flow.
The company also believes that HTIL will continue to need capital to broaden and expand its businesses and accordingly, anticipates that all the current cash in the HTIL Group will be retained to fund its businesses, particularly in Indonesia and Vietnam, resulting in no surplus cash being available for dividends.
In addition, HWL believes that after the proposed privatisation, HTIL would be more able to make decisions pertaining to investments without the pressures associated with being a publicly listed company.
It is anticipated that on completion of the privatisation, the listing of the HTIL shares on the Stock Exchange of Hong Kong and the listing of the HTIL ADSs on the New York Stock Exchange will be withdrawn.
(USD1=HKD7.76)
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