Watch TEL In The HTA Recap
It will be ironic if the actions of Telecom New Zealand end up being the difference between Hutchison Telecommunications Australia remaining with a solid rump of independent shareholders, or an almost wholly-owned subsidiary of its Hong Kong parent, Hutchison Whampoa.
Anyone with shares in HTA and wondering about whether to avail themselves of the offer of convertible prefs announced on Monday, should watch what TEL does.
TEL has a 19.9 per cent stake in HTA subsidiary Hutchison 3G Australia (H3GA) which is underwater. It was taken up when it did a deal with HTA on the new generation of digital mobile communications.
It’s though this subsidiary will also be recapitalised in the wake of the recapitalisation of HTA.
Analysts yesterday estimated that it would cost TEL $300 million to maintain its stake which would in effect be a vote in the future of HTA and 3G mobile in Australia (for AAPT, TEL’s Australian arm)
The $2.85 billion recap was announced Monday and pitched as a move to enable HTA pay down debt and speed up its push toward profitability. The company said debt would be slashed by well over $2 billion to $1.1 billion and interest costs would be cut by hundreds of millions of dollars a year.
