March 7, 2003
Things at Hutchison 3G UK Ltd., also known as 3, could be going better. The 3G newcomer, still not quite in full commercial launch mode (see 3 Keeps Europe Waiting), has appealed to its shareholders for a £1 billion loan. The responses from two of its owners are lackluster, to say the least (see Hutch 3G Seeks Loans).
NTT DoCoMo Inc. (NYSE: DCM), which owns a 20 percent equity stake in the U.K. operator, has been asked for £200 million (US$320 million). The Japanese company is contractually obliged to hand over the cash "if certain pre-conditions are fulfilled." DoCoMo has said it won't respond to the loan request until mid-April.
In October last year, DoCoMo wrote down the value of its stake in Hutchison 3G UK by ¥126 billion (US$1.08 billion) to ¥39 billion (US$334 million) (see DoCoMo Takes a $4.7B Hit).
KPN Mobile holds a 15 percent stake in the operator, which it wrote down to zero [as in nothing, zippo, zilch] last August (see Hutch Gets the Hump With KPN). 3 is looking for £150 million (US$240 million) from the Dutch company. The KPN brigade says it will take a month to decide whether this is "a valid funding call."
The remaining 65 percent is owned by Hutchison Whampoa Ltd. (Hong Kong: 0013), which is tucked up in bed for the night. It hasn't issued a release regarding any begging bowl activity, but its share of the new cash injection round would be a cool £650 million (US$1.04 billion).
There was nothing lackluster about the response on the phone when Unstrung called 3's offices to ask about the loan requests. No, it was sharp and to the point: "We're not talking about this," snapped communications head honcho Edwardo Brewster. [Ed. note: wasn't he a character in The Beano?]
Brewster seemed a little peeved that KPN Mobile and NTT DoCoMo Inc. (NYSE: DCM) had issued press releases about the loan requests.
Shortly after our call, an emailed statement from our man Brewster hit the Inbox: "3 has begun the rollout of commercial services in the UK and is delivering handsets to customers within the next two weeks. As we begin to enter the next phase of our business, with plans for aggressive growth in the future, in line with the terms of the original shareholders agreements we have approached our shareholders regarding next-stage investment. We have no further announcements to make."
Further calls to 3 regarding the matter, especially KPN's "validity" question, went unanswered.
— Ray Le Maistre, European Editor, Unstrung
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