Hutchinson raises £3.1 bn from institutional investors

Hong Kong conglomerate Hutchison Whampoa said Friday that it would receive £3.1 billion capital in British currency from five institutional investors for its mobile telecommunications business in the UK.

Hutchison is pushing plans to take over O2 UK, the second-biggest mobile carrier in the country, from Spanish telecom giant Telefonica for £10.25 billion and merge it with its UK mobile unit. The deal would create the largest UK mobile operator with 33 million customers.

The Canada Pension Plan Investment Board, Singapore sovereign wealth fund GIC and Abu Dhabi Investment Authority subsidiary Limpart Holdings are among the five investors. They would be expected to own a combined 33-per cent stake in the new company.

The O2 acquisition would be subject to approval by EU regulators. For financing the deal, Hutchison would also seek a £6-billion credit line from a lender.

In separate announcements, GIC, with an investment portfolio estimated at over $300 billion, and CPPIB, with C$239 billion ($197 billion), said they would contribute £1.1 billion each in Hutchison's UK mobile phone operator Three UK, after that company's acquisition of rival 02.

In an announcement, Hutchison Whampoa, the holding company of billionaire Li Ka-shing, listed the C$225.9 billion Caisse de depot et placement du Quebec, Montreal, Abu Dhabi Investment Authority subsidiary Limpart Holdings and Sao Paulo-based investment banking and money management firm BTG Pactual as three of the investors.

In a CPPIB news release, Mark Jenkins, senior managing director and global head of private investments, said, ''We expect this investment will generate attractive long-term risk-adjusted returns, which is appealing for an investor like CPPIB.''

The CPPIB investment is expected to close in 2016.