Hong Kong sale to net pounds 100m for Vodafone
Saturday 03 January 1998
The move follows a long-awaited HK$4.84bn (pounds 380m) deal signed on New Year's Eve between Pacific Link and Hongkong Telecom, the hugely profitable phone giant which is majority-owned by Cable & Wireless. Vodafone had a 35 per cent stake in Pacific Link, with the remainder owned by First Pacific, the conglomerate. The deal is expected to be completed by 5 January.
Vodafone said it would use the cash proceeds to reduce its borrowings, which were about pounds 630m at the time of the group's last financial results. The operator's share price, which soared by 80 per cent last year, rose a further 6p to 445p on yesterday's news.
A spokesman said Vodafone had viewed Pacific Link as a non-core business, partly because it used the US digital mobile standard, unlike the GSM digital technology employed by the UK group and across Europe. Vodafone also pointed to fierce competition between Hong Kong's 11 mobile networks.
In recent months Vodafone has bolstered its international strategy, offering to take a controlling interest in Libertel, the Dutch phone group, and indicating it would exercise an option to raise its shareholding in SFR, the French digital mobile operator.
On Monday the four UK mobile operators will announce subscriber numbers for the last quarter of 1997, with bumper growth expected in the run-up to Christmas.
Analysts expect Vodafone and One2One to tie for first place, with increases of around 150,000 in their subscriber base. Orange, the newest network, is likely to be in third place, with Cellnet expected to show the smallest expansion.
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