Page 32 - Sphere No.13 (Dec 2004)

SPHERE 30
C O R P O R A T E
group. But raising cash was not the
primary motivation for the listing.
Right Time
“It was a good opportunity to ascribe
paper value to Hutchison Telecom and
allow investors to participate in the
future growth in the company,” notes
CFO Tim Pennington, who
played a key role in the IPO.
“Hutchison Telecom had
reached an inflection point
in its development. We had
achieved a critical mass in
our customer base and also
reached the peak of the
capex cycle for the current businesses.
The next step was to
become a pub-
lic company,
w h i c h
would allow
us to devel-
op the busi-
ness to the
next level.”
At the helm of
the development
process is Dennis
Lui, Hutchison Telecom’s CEO.
“Market timing was a crucial consid-
eration,” he says. “If we had waited for
two more years before listing, we might
have got a better price for our shares
because our business would be bigger
and market sentiment might have
improved. But we felt there is
a tremendous window of opportunity
right now for growing markets in Asia,
Eastern Europe and the Middle East.”
“Currently, the bigger telecoms
players in Europe and the US are
resting a bit after the financial difficul-
ties the industry has faced in the past
few years. In our opinion, this has
made now a good time to enter new
markets at moderate prices. The IPO
gives us additional liquidity to do that
and it gives us acquisition currency in
terms of the stock, which we might
want to use in a merger situation.”
“By choosing to list now, we can tap
into financial markets (Hutchison
Telecom has a US$1 billion bank loan
facility), enjoy independence as
a company, and act with the interests of
our own shareholders in mind.
Track Record
HWL has spent almost two
decades building the
Hutchison Telecom portfo-
lio. The Group started out in
the telecommunications
business back in 1985, when
it began offering mobile
communications services in Hong Kong.
Since then, Hutchison Telecom has
established a formidable track record,
earning a reputation for being able to
enter challenging markets and succeed
where others could not.
HWL built the Orange brand and nur-
tured it into a leading global brand. The
second-generation (2G) mobile telecom-
munications business was established in
the UK in 1994 and then sold in 2000 for
a US$14.6 billion consideration.
Funded in large part with profits
1983
Hutchison starts
mobile business
in Hong Kong
1985
Launches the
first commercial
Advanced Mobile
Phone Services
(AMPS) in Asia
using AMPS
network
1986
Acquires and
merges with
a number of
paging companies
to develop paging
services in
Hong Kong
1987
First to offer
uninterrupted
cellular coverage
through Hong
Kong’s cross-
harbour tunnel
1988
Awarded a total
communications
system licence for
Hong Kong and
becomes the
world’s first
cellular operator
to provide both
AMPS and TACS
networks in a
single location
1989
First in Hong Kong
to launch trunked
mobile radio
communication
system
There is a tremendous
window of opportunity right now
for growing markets in Asia,
Eastern Europe and the Middle East