BT sells Hong Kong carrier for a loss
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Your support makes all the difference.British Telecom edged closer to offloading its interests in Asia with the sale yesterday of its stake in SmarTone, a Hong Kong mobile carrier, for a large loss.
The disposal crystallises a loss of about £160m for BT, which received 1bn Hong Kong dollars (£82m) for the stake. Under its former chief executive, Sir Peter Bonfield, the UK group paid £240m for a 20.1 per cent stake in SmarTone in 1999.
BT said the deal, which is expected to complete in January, was part of its "disposal of non-core assets and another step in its debt reduction programme".
Since March 2001, BT has slashed its net debt mountain by more than half to £13.1bn, helped by a £6bn rights issue and disposing of assets such as Yell, the directories business. It recently agreed to sell its 26 per cent stake in France's Cegetel to Vivendi for £2.5bn.
The decision to sell the SmarTone stake came after the Hong Kong developer Sun Hung Kai Properties, the controlling shareholder, raised a general offer for the outstanding shares in the mobile carrier by 3 per cent. The Hong Kong company was obliged to make the general offer after its stake crept over the 30 per cent minimum threshold to 30.10 per cent as the result of a dividend payment.
Analysts had earlier questioned whether the timing was right for BT to realise its long held ambition to sell out of SmarTone but yesterday regarded the move as opportunistic.
A BT spokesman said: "It was a question of keeping to the programme of debt reduction. The price was right at the time." The group is hoping to pare its debt to below £10bn by early 2005.
SmarTone has suffered from competition in Hong Kong's crowded mobile sector, only recently returning to the black after posting combined losses of almost HK$650m in 2000 and 2001.
The disposal leaves BT with stakes in a handful of other Asian telecoms companies including StarHub in Singapore, LG Telecom in South Korea and India's Mahindra BT. It sold its stake in Maxis Communications, a Malaysian cellular company in May 2001. BT's Asian interests were built up via a £1.2bn buying spree under Sir Peter.
After a financial restructuring, the group has been refocused on a strategy of growing organically. Ben Verwaayen, the current chief executive, is seeking to drive revenues from its core UK customer base through product launches such as broadband internet access. BT shares rose 2 per cent to 195p.
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