Hutchison to Aid Its Italy 3G Project

date: August 14, 2001 - source: Siemens UMTS NewsDesk

Hutchison to guarantee Italian loan Pressure is mounting on Hutchison Whampoa to guarantee a planned EUR5.2bn syndicated loan for its Italian 3G network, H3G Italia, according to reports in the Italian press.

This is said to be the first guaranteed loan for 3G that would have to offer recourse to a parent company, as all previous 3G network construction loans have been raised separately on a stand-alone basis. It is understood that fifteen banks have given Hutchison initial feedback on the planned 10-year deal's structure and pricing.

"Everything's evolving at the moment, no-one's been mandated yet, but a guarantee is what everyone would love," an anonymous banker was cited as saying. "There's a lot of pressure on Hutchison to give as much recourse as possible," he added.

Hutchison has refused to comment on the reports that it is having difficulty lining up non-recourse financing for H3G Italia. A spokeswoman said it was still exploring all options. If Hutchison is prepared to back a loan for H3G, sources believe that solid relationships with the banks would result in a successful, cost-effective deal.

It was reported by the Financial Times that Anil Daswani, a Hong Kong-based analyst with Salomon Smith Barney, said in a note to his clients that Hutchison had reportedly received feedback from several banks which suggested that rumoured the loan would require some form of recourse. Daswani stated that if the whole loan is guaranteed by the parent company, Hutchison's consolidated debt would be around EUR26bn at the end of 2001, which would imply a 73%gearing.

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