US-backed fund buys HGC for $1.9bn from Canning Fok group
31 July 2017 | Alan Burkitt-Gray
Private equity company I Squared Capital has bought Hutchison Global Communications (HGC) for HK $14.5 billion (US $1.86 billion).
CK Hutchison, the Hong Kong investor that owned HGC, said it will use the funds to invest in its mobile businesses.
“HGC Group will remain a key supplier of fixed-line services to the company, and the two companies intend to maintain a good and cooperative commercial relationship post transaction,” said Hutchison Telecommunications Hong Kong Holdings (HTHKH), which sold the fixed-line and global carrier and owns mobile operator Three Hong Kong.
I Squared Capital won the deal against competition from a number of other bidders, including – according to reports earlier in July – Chinese government-backed CITIC.
According to Infrastructure Investor, I Squared Capital raised a $3 billion infrastructure investment fund in 2015, and later in the year added $200 million from the US government’s Overseas Private Investment Corporation.
It is doing the deal through a specially set up unit, Asia Cube Global Communications, previously unknown. There is almost no information about I Squared Capital: its website says it “is an independent global infrastructure investment manager focusing on energy, utilities, and transport in North America, Europe, and select high growth economies”.
The managing partner is Sadek Wahba, a former Morgan Stanley banker. Most known investments appear to be in electricity generation, including Viridian, an Irish power company bought last year for around €1 billion.
Canning Fok, chairman of HTHKH, said: “The transaction represents an excellent to crystallise value for the company and its shareholders.” A company statement said that the value of HGC “has not been fully reflected in HTHKH’s share price in recent years.”
Capacity contacted executives at HGC, who had no immediate comment on how the acquisition will affect the carrier.