Transfer Of Stake In Hutchison Max Telecom

Accordingly, Hutchison Telecom will reduce its 49 per cent stake in the Indian venture to 29 per cent. This will be done by transferring 20 per cent of its equity to HMH. MTVL, which holds 50 per cent in Hutchison Max Telecom, will also transfer 20.4 per cent of its stake to HMH.

The entire operation is aimed at maintaining the two promoters' majority holdings in the cellular operator without any threat of dilution because of the infusion of the $150 million ADR issue money into Hutchison Max Telecom. The company got the ADR clearance in September this year.

At present, Hutchison Max Telecom's equity is held by three companies. Max Telecom Ventures (MTVL) the Indian promoters, hold 50 per cent, one per cent is held by Liquid Investment & Trading Co (LITC), which belongs to the Indian promoter and 49 per cent held by the overseas partner Hutchison Telecommunications(HTIL).

 

Since fresh equity through ADR will bring down the stake of both promoters it is proposed to split the holdings in a new investment company, HMH.

HMH will issue new shares at par to both the promoters with MTVL getting the majority stake. After transfer of shares and the completion of the ADR, HMH will hold 20.8 per cent of the Hutchison Max Telecom. HTIL and MTVL will hold 29 per cent and 29.6 per cent respectively and the rest will be with ADR investors.

Hutchison Max will acquire on a repatriation basis up to 49 per cent of the total issued capital of HMH.

Shares of Hutchison Max Holdings are to be issued for considerations other than cash and there would be no inward remittances for the issuing of 49 per cent of issued capital of Hutchison Max Holdings.

The American Depository Receipts issue will hit the road sometime during the end of November.