BAe to sell telecom stake: Aerospace group seeks buyer for slice of Hutchison personal network operation
Hans Snook, managing director of Hutchison Telecom in the UK, said: 'BAe is seeking a buyer in order to concentrate on its main businesses. We want a new shareholder - people in the telecommunications business that can bring something else to the party besides money.'
He said the company was talking to very large companies in Europe, North America and Asia.
A BAe spokesman said: 'That stake is best held by a more willing partner who sees it as more of a core activity. But we are in no hurry. It needs to be placed in context and it is not a red- hot burning issue.'
Hutchison, part of the Hong Kong- based Hutchison Whampoa empire, plans to rival both existing cellular telephone networks and fixed telephone services with its PCN service, due to be launched in the first half of next year.
BAe gained the stake two years ago in return for selling Hutchison its Microtel mobile telephone subsidiary. No cash was involved in the exchange. The other shareholder in Hutchison's telecommunications operation here is Barclays, which holds a 5 per cent stake.
Hutchison Whampoa said yesterday that losses incurred by its overseas telecommunications arms in the first half of this year largely offset profits made in the sector in Hong Kong.
In Britain, its existing Telepoint mobile telephone service - a less sophisticated service than PCN known as Rabbit - has been affected by recession and a reduction in consumer spending. Hutchison is also a large paging operator and a leading player in providing services for users of cellular telephone networks.
Although PCNs are said to be on target for early 1994 operation, the group said that the UK businesses 'are being carefully monitored with rationalisation and cost-controlling measures being implemented'.
Mr Snook rejected rumours that the group intends to cut back on UK plans, which will involve a total investment of up to pounds 900m. 'There has been a lot of mischief spoken about Hutchison Whampoa's telecom plans. We are looking at these businesses very carefully but that just means that normal business practices are being applied.' He said Rabbit and PCN were obviously loss-making in the start-up phase, adding: 'We are going to make them profitable.'
The company's rival in PCN is Mercury One-2-One, which is gearing up for launch within the next few months.
Hutchison Whampoa increased its pre-tax profits to dollars 443m in the first half of the year from dollars 294m in the same period a year before.
Turnover rose to dollars 1.48bn from dollars 1.3bn in the first six months of 1992. The group declared an interim dividend of 2.44 cents, up from 2.05 a year earlier.
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