State-owned enterprise, China Merchants Group Ltd., has bought a 40% stake in the fiber assets of HKT Trust & HK Ltd., a unit of Hong Kong telecom group PCCW Ltd., reports Bloomberg. China Merchants’ investment arm will pay about $870 million for the stake in Regional Link Telecom Services Holdings Ltd., PCCW said in a filing Wednesday, confirming a Bloomberg News report in May. Proceeds from the transaction will be used for general corporate purposes, including debt repayment, PCCW said.
The sale “could be interpreted as a cash call” by PCCW for media business development, as there’s no urgency to raise funds, Bloomberg Intelligence analysts Marvin Lo and Chris Muckensturm wrote in a note. HKT may distribute part of the proceeds as special dividends to shareholders, they said.
PCCW, controlled by Hong Kong tycoon Richard Li, has been selling other stakes, including 26.1% of its video streaming service Viu to Canal+ a year ago. The French broadcaster raised its stake this month and has the option to lift it further. PCCW also sold its data center business to DigitalBridge Group Inc.