UK-owned Cable & Wireless Communications (CWC) confirmed yesterday that it has agreed to sell its controlling 51% stake in Companhia de Telecomunicacoes de Macau (CTM) for USD749.7 million to Hong Kong-based Citic Telecom International Holdings. Concurrently, Citic Telecom announced that it has agreed to acquire the 28% stake in CTM held by Portugal Telecom (PT) for USD411.6 million. Added to Citic’s existing 20% stake in CTM, the two transactions will give the Chinese-owned group a 99% stake in the Macanese fixed, wireless and broadband operator for a total purchase price of USD1.161 billion. A 1% stake in the telco will be retained by Macau Post.
The disposal of CWC’s and PT’s stakes remains conditional on the completion of each other, as well as approval of both transactions by the Government of Macau and by the relevant People’s Republic of China governmental and regulatory authorities, expected to take place within six to nine months. The acquisition costs for the stakes held via CWC’s wholly-owned subsidiary Sable Holding and PT will be paid in cash by Citic Telecom, which intends to fund the takeover with internal resources and loan agreements from a group of banks and other financial institutions.
CTM reported revenue of USD524 million and EBITDA of USD165 million in the twelve months to 31 March 2012. At the end of September 2012 it had around 712,000 mobile subscribers (98% of them 3G), 143,000 fixed broadband customers and around 165,000 fixed lines in service. The latest deal values CTM at USD1.47 billion including debt. Citic Telecom, part of Chinese state-owned conglomerate Citic Group, acquired its initial 20% stake in CTM in 2010.
CWC said the divestment of its interest in Macau is a further step in its strategy to reshape its portfolio, reduce geographic spread and grow its business in the Central American and Caribbean regions, following the announcement of the sale of its Monaco & Islands businesses in December 2012. Following completion of these deals, CWC’s operations will be primarily in the pan-America region.
Alongside their share sale agreement, PT and Citic Telecom entered into a strategic alliance agreement ‘for capitalising on their respective expertises in certain areas of collaboration in the telecom sector and in the identification of ICT investment opportunities,’ a press release stated. Pursuant to this strategic alliance agreement, Citic Telecom will select PT as strategic ICT service provider.