PCCW Ltd. Chairman Richard Li said he won’t reduce his shareholding in Hong Kong’s biggest phone company, which is seeking to spin off its telecommunications assets to focus on media operations such as pay television.
PCCW will “gradually” expand remaining businesses such as computer services and media internationally after the proposed spinoff of HKT Trust, Li told shareholders in Hong Kong today. He also said he won’t reduce his stake in HKT Trust.
Billionaire Li, son of Hong Kong’s richest man, said PCCW will only proceed with the initial public offering of HKT Trust if it achieves a minimum valuation of HK$28.6 billion ($3.7 billion). The trust aims to draw investors by distributing a higher proportion of PCCW’s income from fixed-line, mobile-phone and broadband Internet operations.
Proceeds from the spinoff will allow PCCW to invest in faster-growing businesses, Li said. Telecommunications operations are more “defensive” assets, he said.
PCCW shares rose 0.7 percent to HK$2.92 as of 2:06 p.m. in Hong Kong trading, and have declined 15 percent this year. The company had a market capitalization of HK$21.1 billion based on its closing share price yesterday.
Li boosted his holding in PCCW to 27.5 percent from 27.4 percent after acquiring 5.3 million shares on Oct. 7, according to a Hong Kong stock exchange filing last week.
The proposed spinoff is at least the sixth attempt since 2006 to reorganize PCCW, whose shares have declined more than 90 percent from their February 2000 peak. Li, PCCW’s biggest shareholder and son of Cheung Kong (Holdings) Ltd. Chairman Li Ka-shing, failed to buy out minority shareholders and delist the company in 2009, after unsuccessful attempts in the previous three years to sell down his interests in PCCW.
PCCW may raise more than HK$10 billion from the listing of HKT Trust, the company said last month. Proceeds will be used to reduce debt and for investments, the company said.
PCCW aims to complete the listing of HKT Trust in the first week of November, two people with knowledge of the matter said this month. The company may start gauging investor demand in the middle of this month, the people said.
The decline in global stock markets last quarter prompted companies including Sany Heavy Industry Co. to delay or cancel share sales in Hong Kong.