CVC Capital Partners to buy telecom assets of City Telecom for $644 million

Private equity firm CVC Capital Partners will buy the telecom and broadband assets of Hong Kong-listed City Telecom (H.K.) Limited, for around HK$5 billion ($644 million).
 
City Telecom, which seeks to focus on its television broadcast business, will sell its telecom and broadband assets in Hong Kong, China and Canada that include long-distance phone services in Hong Kong and Canada as well as broadband internet services in Hong Kong and call-centre and customer support services in China, to Metropolitan Light Co - owned by a partner of funds advised by CVC Asia Pacific Ltd.
 
The sale comes after City Telecom invested around $400 million on building its fibre-based broadband network that covers nearly two million homes across Hong Kong, and provides  broadband and telephony services through its subsidiary Hong Kong Broadband Network.

City Telecom said that it will use the proceeds from the sale to build out its free-to-air television service that is expected to cost HK$2.5 billion over the next four years.

Metropolitan will fund the transaction by receiving HK$2.65 billion from funds advised by CVC Asia Pacific, and has access to HK$2.5 billion of debt funding from banks including JPMorgan Chase & Co. and Standard Chartered Plc, said City Telecom in its filing with the exchange.

London-based CVC Capital, which manages more than $44 billion of funds and owns a controlling stake in the Formula One auto-racing series, has made the acquisition after it paid $269 million for a 49 percent stake in the Indonesian cable TV and Internet businesses of First Media from the Lippo Group last year.