HKT, a subsidiary of PCCW, has agreed to sell a minority stake in Regional Link Telecom Services Holdings to China Merchants Capital.
Updated Jun 26, 2024, 09:11am EDT
HKT, a subsidiary of Hong Kong billionaire Richard Li’s flagship telecommunications group PCCW, is selling a 40% stake in a fiber unit for $870 million in cash to the investment arm of Chinese state-owned conglomerate China Merchants Group.
HKT, one of Hong Kong’s major telecoms operators, has agreed to sell its interests in Regional Link Telecom Services Holdings to China Merchants Capital Holdings, which is jointly owned by China Merchants Group and Asian logistics operator GLP Holdings, according to a filing to the Hong Kong stock exchange Wednesday.
The sale will help HKT to further expand its network infrastructure and broaden its service offerings to people in areas including digital lifestyle applications, PCCW said. HKT will deploy the capital for general corporate purposes, including the repayment of debt, the telecommunications conglomerate added.
HKT’s shares sale “could be interpreted as a cash call” by PCCW for media business development, as it has no urgency to raise funds, wrote Bloomberg Intelligence analysts Marvin Lo and Chris Muckensturm in a note.
PCCW has been actively selling its assets. Its video streaming unit Viu announced last June it was selling a 26.1% stake for $200 million to Canal+, the pay-TV group controlled by French billionaire Vincent Bolloré’s media conglomerate Vivendi. PCCW has also previously sold its data center business to DigitalBridge, a New York-listed digital infrastructure investment firm, for $750 million.
Li is a son of Hong Kong’s wealthiest billionaire, Li Ka-shing, and chairs Asia-based investment company Pacific Century group, which has interests in finance, technology and property.