HUTCHISON WHAMPOA LIMITED
(Incorporated in Hong Kong with limited liability)
CONNECTED TRANSACTION
COMPLETION OF ACQUISITION OF INTERESTS IN, PROVISION OF FINANCIAL ASSISTANCE TO, HUTCHISON TELEPHONE COMPANY LIMITED
| The Directors are pleased to announce completion of the acquisition of the Subject Shares from MAL today resulting in HTCL being held as to about 81 per cent by WHL and about 19 per cent by HTCL Holdings.
In satisfaction of certain conditions precedent to completion of the Acquisition, the Company provided certain additional security and extended its undertaking given in connection with certain loan facility documents and leasing transactions entered into by HTCL. The provision of such security and undertaking constitutes a connected transaction for the Company under the Listing Rules. Pursuant to Rule 14.25(1) of Chapter 14 of the Listing Rules, brief details of such security and undertaking are required to be disclosed in this announcement, and details of the additional security and undertaking will be included in the Company's next published annual report and accounts in accordance with Rule 14.25 (1)(A) to (D) of the Listing Rules. |
THE SHARE CHARGE, THE UNDERTAKING, THE INDEMNITY AND THE REPLACEMENT GUARANTEE
The Company announced on 22 February 2001 the entering into of the Agreement for the Acquisition. The Directors are pleased to announce completion of the Acquisition today resulting in HTCL being held as to about 81 per cent by WHL and its wholly owned subsidiaries and about 19 per cent by HTCL Holdings.
One of the conditions precedent for Completion was the obtaining of all requisite consents, releases and approvals under the Facility and the US Leases (the "Condition").
In fulfilment of the Condition, the Share Charge and the Undertaking have been provided. Under the Agreement, WHL has also agreed to indemnify MAL and Motorola fully against all liabilities, losses, claims, costs and expenses incurred or sustained by MAL or Motorola under the US Leases (the "Indemnity") prior to release and discharge in full from all their respective obligations and liabilities under the US Leases. Upon the issue of the Replacement Guarantee to replace the Motorola's US Leases Guarantee, the Company will guarantee all future obligations and liabilities of HTCL under the US Leases.
OFFER TO HTCL HOLDINGS
As stated in the Previous Announcement, WHL has offered HTCL Holdings the right to acquire a pro rata portion of the Subject Shares (ie representing about 6.37 per cent of the interest in HTCL ("Offer Shares")) to preserve HTCL Holdings' right to participate under its existing pre-emption right. Such right is contained in the Option Agreement and may be exercised at any time within 57 days from the date of Completion. Upon exercise of such right, HTCL Holdings or another subsidiary company of NTT DoCoMo, Inc. will acquire the Offer Shares for a consideration of US$30,440,000 (which is the same price as that paid by WHL to MAL for the Offer Shares) together with interest accrued thereon. In the event of HTCL Holdings acquiring the Offer Shares, HTCL Holdings or its holding company may or may not provide a similar share charge over the Offer Shares as the Share Charge and/or other similar security as the Undertaking, the Replacement Guarantee or the Indemnity. In the event HTCL Holdings does not exercise such right and/or does not provide any security in connection with the Facility or the US Leases upon exercise of such right, the Company will continue to provide 100 per cent of the security in connection with the Facility and the US Leases whilst it has a shareholding of about 81 (or, upon acquisition of the Offer Shares by HTCL Holdings, about 74.63) per cent of the issued shares of HTCL.
GENERAL
HTCL is a provider of cellular mobile telephone services.
The terms of the Share Charge, the Undertaking and the Indemnity were arrived at after arm's length negotiations and are on normal commercial terms. The Directors, including the independent non-executive Directors, consider the Share Charge, the Undertaking and the Indemnity to be in the interests of the Company and its shareholders and on terms which are fair and reasonable so far as the Company and its shareholders are concerned.
CONNECTED TRANSACTION
HTCL is currently held as to about 81 per cent by WHL and its two wholly owned subsidiaries, Lugton Limited and Choice Forward Limited, and as to about 19 per cent by HTCL Holdings, an indirect subsidiary of NTT DoCoMo, Inc. which is a substantial shareholder of Hutchison 3G UK Holdings Limited, another non wholly owned subsidiary of the Company. The provision of the Share Charge, the Undertaking and the Indemnity constitutes, and the Replacement Guarantee when executed will constitute, connected transactions for the Company under the Listing Rules. The acquisition of the Offer Shares pursuant to the exercise of the right under the Option Agreement will constitute a connected transaction for the Company under the Listing Rules.
Pursuant to Rule 14.25(1) of the Listing Rules, brief details of the Share Charge, the Undertaking, the Indemnity and the Replacement Guarantee and, if applicable, the sale of the Offer Shares pursuant to the exercise of the right under the Option Agreement are required to be disclosed in this announcement, and details thereof will be included in the Company's next published annual report and accounts in accordance with Rule 14.25 (1)(A) to (D) of the Listing Rules.
In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:
| "Acquisition" | the acquisition by WHL from MAL of the Subject Shares in accordance with the terms and conditions of the Agreement |
| "Agreement" | the conditional agreement dated 22 February 2001 between WHL, MAL, Motorola and HIL in respect of the sale and purchase of the Subject Shares |
| "associate(s)" | shall have the meaning ascribed to it by the Listing Rules |
| "Banks" | a syndicate of banks which are independent of the directors, chief executive and substantial shareholders of the Company, its subsidiaries and their respective associates |
| "Company" | Hutchison Whampoa Limited, a limited liability company incorporated in Hong Kong, the shares of which are listed on the Stock Exchange |
| "Completion" | completion of the Agreement |
| "Directors" | directors of the Company |
| "Facility" | a HK$4 billion senior secured credit facility extended to HTCL by the Banks pursuant to an agreement dated 31 March 2000 |
| "HIL" | Hutchison International Limited, a limited liability company incorporated in Hong Kong and a wholly owned subsidiary of the Company |
| "HK$" | Hong Kong dollars |
| "Hong Kong" | the Hong Kong Special Administrative Region of the PRC |
| "HTCL" | Hutchison Telephone Company Limited, a limited liability company incorporated in Hong Kong and an indirect non wholly owned subsidiary of the Company |
| "HTCL Holdings" | HTCL Holdings Limited, a limited liability company incorporated in Hong Kong and an indirect subsidiary of NTT DoCoMo, Inc. |
| "Listing Rules" | the Rules Governing the Listing of Securities on the Stock Exchange |
| "MAL" | Motorola Asia Limited, a limited liability company incorporated in Hong Kong and a direct wholly owned subsidiary of Motorola |
| "Motorola" | Motorola Inc., incorporated under the laws of the State of Delaware, the United States of America |
| "Motorola's US Leases Guarantee" | the guarantees dated 30 June 1998 provided by Motorola in connection with up to 30 per cent of the obligations and liabilities of HTCL under the US Leases |
| "Option Agreement" | the agreement dated 24 April 2001 made between the Company and NTT DoCoMo, Inc. granting the latter the right to acquire the Offer Shares |
| "PRC" | the People's Republic of China |
| "Previous Announcement" | the announcement made on 22 February 2001 by the Company in connection with the entering into of the Agreement |
| "Replacement Guarantee" | the guarantees which the Company will provide to replace the Motorola's US Leases Guarantee |
| "Share Charge" | a charge over 18,896 of the Subject Shares (representing about 15.8 per cent of HTCL's issued shares) dated 24 April 2001 created by Choice Forward Limited, an indirect wholly owned subsidiary of the Company, as additional security for HTCL's obligations under the Facility |
| "Stock Exchange" | The Stock Exchange of Hong Kong Limited |
| "Subject Shares" | 30,000 "B" shares of HK$10 each in the share capital of HTCL, representing about 25.1 per cent of the entire issued share capital of HTCL |
| "Undertaking" | the undertaking dated 31 March 2000 executed by the Company pursuant to which the Company undertook to the Banks to provide 74.9 per cent (as extended to 100 per cent with effect from Completion) of the necessary funding in connection with performance bonds required to be issued in connection with HTCL's third generation mobile activities |
| "US Leases" | the US leasing transactions for telephone network equipment entered into by HTCL on 30 June 1998 with a number of leasing companies which are independent of the directors, chief executive and substantial shareholders of the Company, its subsidiaries and their respective associates and which have an aggregate lease value of approximately US$380 million |
| "US$" | United States dollars |
| "WHL" | Whampoa Holdings Limited, a company incorporated in Jersey and an indirect wholly owned subsidiary of each of HIL and the Company |
By Order of the Board
Edith Shih
Company Secretary
Hong Kong, 24 April 2001
22/F, Hutchison House, 10 Harcourt Road, Hong Kong. Tel: 2128 1188 Fax: 2128 1705
Website: http://www.hutchison-whampoa.com
Please also refer to the published version of this announcement in Hong Kong iMail and Sing Tao Daily.
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