Australian incumbent carrier Telstra has agreed to sell its Hong Kong mobile business CSL to HKT Limited for $2.425 billion.
In a statement to the Australian Securities Exchange, Telstra said the deal would equate to proceeds of approximately A$2 billion ($1.8 billion) for its 76.4% stake in the business. HKT will also acquire the remaining 23.6% shareholding held by New World Development. Telstra is expected to generate a profit of A$600million from the sale of CSL.
Telstra chief executive officer David Thodey said Telstra had enjoyed considerable success in Hong Kong but this was a great opportunity to maximize shareholder value.
“CSL has been a strongly performing business, the compound annual revenue growth rate was 9.4%% over the last three years and we have gained market share,” said Thodey. “We are proud of CSL’s achievements. It has established itself as a premium brand and strong player in the market, last year adding 425,000 mobile customers.”
“However, there are a number of dynamics in the Hong Kong mobile market that means this is the right opportunity for Telstra to maximize our return on this successful asset.”
Thodey said Asia remained an important part of Telstra’s strategy and the company intended to be in the region for the long term.
“We want to leverage our domestic strengths to grow our global footprint. The team is focused on refining and enhancing our strategy across Asia and identifying further opportunities to build our capability in the region.”
The sale is subject to regulatory approval in Hong Kong and HKT and PCCW Limited security holder approval.
HKT, formerly known as Hong Kong Telecom, is part of PCCW controlled by Richard Li, with which Telstra partnered for many years in a joint venture called Reach.
In a statement issued this morning, HKT said the company has made an application to regulator the Communications Authority (CA) for consent to the change in carrier licensee which would result from completion of the proposed acquisition.