Hutchison Telecom Falls on Orascom Plan to Cut Stake

Hutchison Telecommunications International Ltd., controlled by billionaire Li Ka-shing, fell by the most in more than four months in Hong Kong trading after Orascom Telecom Holding SAE cut its stake in the carrier.

Hutchison Telecom stock dropped 5.7 percent to HK$10.66 as of 3:45 p.m., the largest decline since June 5. Orascom raised about $198 million selling 143.4 million shares in the Hong Kong company at HK$10.70 apiece, James Griffiths, a spokesman for sale arranger Citigroup Inc. said by e-mail today.

Orascom, controlled by billionaire Naguib Sawiris, bought a 19.3 percent stake in Hutchison Telecom in 2005 for $1.3 billion from Hutchison Whampoa Ltd. The reduction in Orascom's stake comes three months after the Egyptian company received about $793 million in dividends from a Hutchison Telecom unit sale in India.

"Hutchison Telecom stock has gone up, and the market is strong, so it is a good time to sell," said Andrew Jobson, a Hong Kong-based analyst for Daiwa Institute of Research. Jobson has a "hold" rating on Hutchison Telecom stock.

Hutchison Telecom shares had gained 12 percent in the three months before today's trading, compared with a 28 percent advance in the city's benchmark Hang Seng Index.

No. 2 Shareholder

Cairo-based Orascom is the second-largest shareholder in Hutchison Telecom, according to the Hong Kong company's interim report in September. Li controls 51.7 percent of Hutchison Telecom through his personal holdings and the stake held by Hutchison Whampoa in the carrier, according to the report.

Hans Leung, a Hong Kong-based spokesman for Hutchison Whampoa, didn't immediately respond to a message and e-mail seeking comment. Sabrine El Hossamy, a Cairo-based spokeswoman for Orascom, wasn't immediately available for comment after a message was left on her office phone.

Orascom, the largest mobile-phone company in the Middle East and North Africa, said in July it received the dividend payment from Hutchison Telecom from proceeds of the $10.7 billion sale of a 67 percent stake in India's Hutchison Essar Ltd. to Vodafone Group Plc in May.

Hutchison Telecom sells wireless services in eight markets in Asia, Middle East and Africa. Hutchison Whampoa, Li's largest company, has assets spanning telecommunications, ports, and energy.

Wind Talks

Wind Telecomunicazioni SpA, an Italian mobile operator controlled by Sawaris, is in talks to form a venture with 3 Italia SpA in which the two carriers will place their telephone towers, Wind Chief Executive Officer Luigi Gubitosi said on Sept. 27. A stake sale in the venture may follow, Gubitosi said.

The sale of a 50.1 percent stake in the venture comprising Wind and 3 Italia's towers that house antennas used to emit wireless phone signals may raise more than 2 billion euros ($2.9 billion), the Ansa newswire reported on Oct. 16, without citing anyone. 3 Italia is controlled by Hutchison Whampoa.