Hong Kong's PCCW to combine telco, media units

Hong Kong's PCCW plans to fold its media and telecoms businesses into a separate firm and sell 45% of the new company to investors, a Reuters report said.

The plan is part of its latest effort to hive off core assets, the report added.

Shares of PCCW surged more than 11%, ending 9.4% higher, on hopes of a separate listing of the assets that have a current market worth of around US$3.9 billion (€2.51 billion).

PCCW said it will group its main media and telecoms divisions into a new firm called HKT Group Holdings, and invite proposals from potential investors, the report said.

Analysts noted several benefits of the plan, including slashing a crippling tax burden and speeding up the possible listing of its more valuable telecoms assets separately from its Pacific Century Premium Developments property unit.

'Apparently, they will put everything except properties into the new company,' said Kelvin Ho, an analyst at Nomura International, quoted by the report.
'This is a way to unlock the value of its assets.'

The reorganization does not need the approval of shareholders as it is an internal group shift and there is no change of ownership of the assets, PCCW said.

The company said it may use proceeds of the possible stake sale for investments in further growth initiatives in telecoms, media and technology.

It did not identify any potential investors.