--Cable & Wireless Communications in talks to sell all of
its 51% stake in Macau telecom operator to China's Citic Telecom
International Holdings
--Sale of the Macau unit would accelerate U.K.-based telecom
operator's efforts to streamline its operations
--Talks come amid broader U.K. telecom industry realignment
after Vodafone Group in July acquired Cable & Wireless
Worldwide
By Yvonne Lee and Juro Osawa
HONG KONG--Cable & Wireless Communications PLC (CWC.LN) is
in talks to sell all of its 51% stake in a Macau telecom operator
as the U.K.-based international telecommunications operator tries
to streamline its operations and focus on other regions such as
Panama and the Caribbean.
Citic Telecom International Holdings Ltd. (1883.HK), the telecom
subsidiary of Chinese conglomerate Citic Pacific Ltd. (0267.HK),
said Wednesday that it is in discussions to acquire Cable &
Wireless Communications' stake in Companhia de Telecomunicacoes de
Macau SARL. Citic didn't provide the financial terms of the
potential deal. A Cable & Wireless Communications spokesman in
Macau declined to comment.
The Financial Times, citing people familiar with the situation,
reported that the sale of Companhia de Telecomunicacoes de Macau
could raise $600 million to $650 million.
Companhia de Telecomunicacoes de Macau is Macau's only provider
of fixed-line voice call services, and it also operates mobile and
Internet services.
The talks come amid a broader realignment in the U.K. telecom
industry. In 2010, Cable & Wireless PLC split into Cable &
Wireless Communications--which now has businesses in the Caribbean,
Panama, Macau and Monaco -- and Cable & Wireless Worldwide PLC,
which has operations in the U.K. and the rest of Europe as well as
the U.S. and Asia.
In July, U.K.-based global telecom giant Vodafone Group PLC
turned Cable & Wireless Worldwide into a wholly owned unit.
The sale of the Macau operations could potentially help Cable
& Wireless Communications improve its financial standing.
At the end of June, Cable & Wireless Communications was
sitting on about $1.42 billion in net debt. At the end of March,
the company had $312 million in cash and cash equivalents.
Citic Telecom, which already holds a 20% interest in the Macau
telecom company, said Tuesday that possible funding options for the
acquisition would include internal resources, bank or debt
financing, as well as equity financing including a rights issue. No
definite agreement has been reached at this stage, the company said
in a statement to the Hong Kong Stock Exchange.
For Citic Telecom, which provides various mobile-related
services for telecom operators around the world, the acquisition of
the Macau company would represent its effort to build a foothold
for further expansion of its overseas operations.
Write to Yvonne Lee at yvonne.lee@wsj.com Juro Osawa at
juro.osawa@wsj.com
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