CVC Capital to buy Hong Kong City Telecom assets for $644 million

Telecom Lead Asia: CVC Capital Partners, a private equity
firm, will buy telecommunications assets from City Telecom (HK) for $644


Metropolitan Light, owned by a partner of funds advised
by CVC Asia Pacific, will buy City Telecom’s businesses including Hong Kong
Broadband Network. CVC is acquiring the City Telecom assets through
Metropolitan Light Company.


The deal is backed with a HK$2.5 billion loan
from Standard Chartered Bank and J.P. Morgan.

CVC’s latest Asia media sector acquisition adds to last
year’s $269 million purchase of a 49 percent stake in the Indonesian cable TV
and Internet businesses of First Media from the Lippo Group..


The London-based firm also owns Australian TV network
nine, but is stuck in a battle with hedge funds for control of the company. CVC
acquired Nine for A$5.3 billion in cash and debt from media baron James Packer
in several transactions between 2006 and 2008.

City Telecom will use the income from the sale of its
telecommunications-related businesses in Hong Kong and Canada to build out its
free-to-air television service, which includes a multimedia centre and is
expected to cost HK$2.5 billion over the next four years.


The company expects to be one of three new recipients of
free-to-air licences in Hong Kong, it said in a statement.


CVC’s latest Asian investment comes at a time when the
buyout firm is readying to list the Formula One motor racing series
in Singapore in a nearly $1.5 billion IPO.


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