Hutchison Whampoa and Li Ka Shing Foundation Acquire Scailex
OREANDA-NEWS. June 7, 2012. Hutchison Whampoa Limited ("HWL") by virtue of its subsidiary Persall Pte Ltd. and the Li Ka Shing Foundation (the "Foundation") by virtue of its subsidiary Kelburgh Pte Ltd announced today that they have entered into a conditional agreement to acquire 50 per cent and 25 per cent, respectively, of Scailex Corporation Ltd ("Scailex") from Suny Electronics Ltd ("Suny") for a combined consideration of USD125 million. Scailex owns 44.5 per cent of Partner Communications Company Ltd. ("Partner"), a leading telecommunications services provider in
As part of the transaction, Scailex will sell its Samsung cellular handsets import, distribution and services business to Suny, for USD100 million, providing Scailex with cash of USD100 million to reduce its debt load.
Scailex has existing total debt of approximately USD760 million, of this, USD300 million is owed to the HWL Group and approximately USD460 million to third parties. To enhance Scailex's financial position, upon completion of the transaction, the HWL Group has agreed to extend the repayment date of the USD300 million loan by three years from 2014 to 2017. As a further measure to enhance Scailex's ability to service its debts and mitigate its negative net asset value, Scailex will seek to repurchase approximately 50 per cent of its outstanding non-convertible bonds at a purchase price that is 9 Agorot (9 Shekel Cents) higher than the closing prices of the bonds on the last trading day before the announcement of the transaction (please see table below), after adjusting for the principal repayment prior to completion.
The completion of this transaction is conditional upon, among other things, approval from regulatory authorities, shareholder approvals, the sale of the Samsung business AND the successful repurchase of at least 50 per cent of Scailex's non-convertible bonds.
Upon completion, the HWL Group and the Foundation intend to appoint Amikam Cohen as Chairman of the Board of Partner. The HWL Group and the Foundation believe that the experience of Mr Cohen in the telecommunications industry will contribute significantly to Partner's ability to lead the Israeli telecommunications market.
The HWL Group founded Partner in 1997 and launched its cellular network in
In 2009, Scailex acquired a controlling interest in Partner from the HWL Group. Following an approach to the HWL Group on behalf of the controlling shareholder in Scailex, as well as on behalf of Scailex, the HWL Group resolved to return to lead Partner in the new and evolving telecommunications industry in which the company now operates.
The HWL Group, which operates telecom services in 13 markets across the globe, will bring to Partner its experience and capabilities in building successful telecommunications companies that serve as leaders in the telecommunications industry.
The Foundation, which was established in 1980 by international businessman and philanthropist Li Ka-shing, invests in select projects in
Since 1997, the year in which Partner was founded, the HWL Group has operated in
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