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CVC acquires Hong Kong Broadband Network
12 April 2012
Private equity group to acquire broadband and IDD businesses from Hong Kong’s City Telecom for $644m
Private equity firm CVC Capital Partners will acquire broadband and telecommunications assets from Hong Kong operator City Telecom for about $643.92 million. After the deal, stock exchange-listed City Telecom is expected to concentrate on its expanding television business.
According to reports, HKBN’s employees and executive team will keep operating the business, and its key executives will be retained as well, including CEO William Yeung, CFO NiQ Lai and CTO Sui Lun Lo.
City Telecom, founded by Ricky Wong, started 20 years ago by offering cheap international calling services to compete with the then incumbent operator in Hong Kong. It began building its own ethernet cable and fibre network in 1999, and now is aiming at coverage of 95% of Hong Kong’s homes, offering speeds up to one gigabit a second.
A combination of debt and equity financing will be used to fund the deal, with JP Morgan and Standard Chartered Bank serving as underwriters for the bank debt and CVC Funds providing the equity component of the funding, said CVC.
CVC will acquire assets including broadband operator Hong Kong Broadband Network, long-distance phone services and broadband internet services in Hong Kong and Canada, and call centre and customer support services in China.
Roy Kuan, managing partner for CVC Asia said: “We have drawn upon our global telecom, Hong Kong, operations and financing teams to achieve signing. We look forward to supporting HKBN's management and employees in providing high speed and high reliability broadband and telecom services to its customers.” GTB
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