Orange to float on stock market for pounds 2.8bn

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The Independent Online
PETER RODGERS

Business Editor

Orange, the rapidly growing cellular telephone company launched less than two years ago, is to be floated on the stock market in March for around pounds 2.8bn, making a new fortune for a wealthy Hong Kong businessman.

The expected flotation price will put a pounds 1.5bn tag on a stake controlled by Li Ka-Shing, head of the Hutchison Whampoa group of companies, and also a pounds 700m valuation on minority shares held by British Aerospace, which was a founding partner in the venture.

Orange has only 7 per cent of the more than 5 million customers in the highly competitive cellular telephone market, which is dominated by Vodafone and Cellnet, the first two companies to be granted licences to operate in Britain.

However, from a standing start Orange has grabbed a quarter of the much faster growing digital cellphone section of the market, which experts think will eventually take over most of the business.

Orange said it now had more than 400,000 subscribers and claimed it was taking 30,000 new customers a month from among the 100,000 who are signing up for digital phones. Two-thirds of new cellular telephone customers are now opting for digital. Orange customers are to be mailed with offers of shares, but they will not be given special incentives to invest.

The company's growth over less than two years since the launch of the service in April 1994 has taken the City by surprise, partly because the track record of Hutchison in the United Kingdom had been poor. It was previously the controlling shareholder in the Rabbit telepoint system which was eventually abandoned. The company plans to raise pounds 700m by selling a 25 per cent stake in Orange in the share flotation.

n Orange is to sponsor one of Britain's largest literary prizes, the Orange Prize for Fiction, to be launched later this week. The pounds 30,000 prize will be awarded to the female writer of the best novel of the year, together with a trophy, The Bessie Award.

City comment, page 17

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