Hutchison backs Vodafone in deciding not to sell 3% stake

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The Independent Online

Hutchison Whampoa, the conglomerate controlled by the Hong Kong billionaire Li Ka-shing, yesterday issued a vote of confidence in Vodafone, saying it had no plans to sell its stake in the world's biggest mobile phone operator.

Hutchison Whampoa, the conglomerate controlled by the Hong Kong billionaire Li Ka-shing, yesterday issued a vote of confidence in Vodafone, saying it had no plans to sell its stake in the world's biggest mobile phone operator.

The decision came despite a HK$30bn (£2.6bn) write-off on the stake taken by Hutchison in its first-half results. Vodafone's share price has slipped by one-third since its acquisition of Mannesmann in February.

Vodafone received a further boost when Verizon Wireless, a US mobile group in which the UK company has a 45 per cent stake, unveiled plans to raise $5bn (£3.3bn) through an initial public offering. Analysts value Verizon at $100bn.

Vodafone shares put on 7.5p to 262p. Hutchison owns 3 per cent of Vodafone, worth £5bn.

Mr Li defended the size of the writedown of the stake's value. "We are not under pressure to make more provisions on Vodafone, since the shares have fallen so much," he said.

Hutchison earned $HK50bn from selling its 10 per cent stake in Mannesmann to Vodafone. The Hong Kong group had received the stake in Mannesmann in exchange for selling its controlling holding in Orange to the German group in November. Again proving Mr Li's Midas touch, Hutchison can expect a further multi-billion pound gain from its intention to sell a 22 per cent stake in VoiceStream of the US, being bought by Deutsche Telekom for $50bn.

Standard & Poor's, the credit-rating agency that downgraded BT's debt on Wednesday, removed Hutchison and its parent Cheung Kong Holdings from its Creditwatch. S&P placed both under review for a possible downgrade in May.

Hutchison's interim pre-tax profit jumped almost fourfold to HK$31.1bn, aided by exceptional gains. Sales grew 16 per cent to HK$28.1bn.

Elsewhere, Cable & Wireless stock added 60p to 1,186p, aided by a broker upgrade and reports that the UK company may be able to conduct an auction for its 15 per cent interest in MobileOne Asia.

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