Hutchison Whampoa may sell off telecom business

Posted on | December 8, 2006 |

Hong Kong-based Hutchison Whampoa group is believed to be considering a sale of its telecom business, including its highly lucrative Indian operations.

Sources close to Hutchison Whampoa said the Hong Kong-based giant is willing to consider a sale. While no formal mandate has been given, Goldman Sachs and ABN Amro are believed to have talked to investors for a possible purchase of the stake.

American private equity firms Blackstone Group and Texas Pacific Partners are looking at buying Hutchison Essar, the country’s fourth-largest telecom operator. Blackstone and Texas Pacific may shell out in excess of $8 billion to acquire Hutchison Telecommunications International’s (HTIL) holding in its Indian joint venture Hutch Essar.

According to the Wall Street Journal, Blackstone is in talks with Reliance Communications to bid for the operations. However, an Anil Ambani group official dismissed the possibility.

Hutchison Essar’s enterprise valuation is at over $11 billion. HTIL owns 67% in Hutch Essar, its joint venture with the Essar group which holds rest of the equity. Egyptian cellular operator Orascom indirectly holds close to 12% in the joint venture.

Hutch Essar doubled its user base to 20 million in the last 12 months and expects to close the current year with 25 million users.

This kind of numbers, Ka Shing told the Ruias, will double the valuation of the business over the next couple of years. Exiting at this point, therefore, would be akin to selling cheap

Category: Vodafone

Comments

One Response to “Hutchison Whampoa may sell off telecom business”

1. Harsh
   December 9th, 2006 @ 2:12 am

   So finally consolidation of large players is going to start

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