Fitch affirms PCCW-HKT Telephone

Fitch Ratings said it affirmed PCCW-HKT Telephone Ltd.'s senior unsecured rating at BBB+ with a stable outlook.

This follows Thursday's announcement by parent PCCW Ltd. to sell a further 20% of its equity to China Network Communications Group for around $1 billion.

Fitch understands that PCCW might invest up to HK$5 billion of the share sale proceeds in China's telecoms market, including for possible ventures with China Network Communications Group; however, no timeframe has yet been indicated.

In the meantime, the cash proceeds will reduce PCCW's net debt to around $2.8 billion from $3.8 billion at first half 2004. Furthermore, PCCW expects to receive $360 million in cash from the sale of the PCCW Tower by its 51%-owned subsidiary Pacific Century Premium Developments in addition to proceeds from the sell-down of its interest in Pacific Century Premium and from loan repayments relating to its Cyberport project.

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