Hong Kong Telecommunications-SS (06823) and PCCW (00008) issued a joint announcement. On June 26, 2024, the seller Apex Link Communications Holdings Limited (an indirect wholly-owned subsidiary of Hong Kong Telecom) and the investor entered into a purchase agreement. The seller agreed to sell and the investor agreed to buy the target equity for a total price of $870 million, which will be settled in cash. After completion, the target company Regional Link Telecom Services Holdings Limited will still be an indirect subsidiary of Hong Kong Telecom, that is, the indirect subsidiary of PCCW.
In addition, the seller, investor, and target company have signed a shareholder agreement on the same day as the purchase agreement (including the management and affairs of the target group). The shareholder agreement shall be conditional upon completion and shall come into effect from the completion date. Passive Netco (a wholly-owned subsidiary of the target company) and HKTL (an indirect wholly-owned subsidiary of Hong Kong Telecom) will enter into the main services agreement upon completion.
The target equity refers to 40% of the issued share capital of the target company and accounts receivable of HKD 344 million at completion, which is the amount of accounts receivable of Passive Netco owed to the seller of HKD 859 million and accounts for 40% of it.