Hutch EGM on March 9

Hutchison Telecommunications International (HTIL) will hold an extraordinary general meeting (EGM) next month to seek approval for the planned $11.1 billion sale of the company's stake in an Indian unit to Vodafone Group Plc.

Shareholders will vote on March 9 on the Hutchison Essar sale, Hutchison Telecom said in a statement to the city's stock exchange today. The mobile-phone carrier, controlled by billionaire Li Ka shing, is selling its 67 per cent stake in Hutchison Essar to pay a special dividend and focus on "new markets," the statement said.

Hong Kong-based Hutchison Telecom, which will book a $9.6 billion pretax profit from the sale, has "not made a final decision" on the amounts, the statement said.

Under the terms of its sale agreement with Vodafone, Hutchison Telecom cannot invest in telecommunication businesses in India for three years following the transaction and cannot hire Hutchison Essar employees for six months, it said. Li's Hutchison Whampoa will vote in favour of the sale at the EGM, the statement added.

The Hong Kong company will provide details of its business plans at a meeting with the reporters and analysts tomorrow.

Li's Hutchison Whampoa, which owns 49.7 per cent of Hutchison Telecom's shares, will vote in favour of the sale at the EGM, the statement said.

Hutchison Telecom spokeswoman Mickey Shiu said the sale will be approved if it receives support from the stockholders with 50.1 per cent of the company's shares.

Shares of Hutchison Telecom gained 2.8 per cent to HK$17.20 at the close of trading in Hong Kong, after HSBC group Plc upgraded the company's rating to "neutral" from "underweight" on the planned sale of Hutchison Essar. HSBC also raised Hutchison Telecom's target price.

HSBC analyst Tucker Grinnan, who raised his 12-month target price for the stock to HK$18.30 from HK$16.22, wrote in a report on February 19 that Hutchison Whampoa may pay minority shareholders in Hutchison Telecom as much as HK$19.20 per share and de-list the unit.

Hutchison Essar accounted for almost half of Hutchison Telecom's HK$4.8 billion ($614 million) earnings before interest, tax, depreciation and amortisation in the first half of the last year and 45 per cent of its sales.

Hutchison Telecom, operator of mobile-phone networks in nine countries, posted a profit for the nine months ended on September 30, compared with a loss a year earlier. Net income excluding minority interests for the period was HK$109 million, compared with HK$209 million loss a year earlier, the company said in today's statement. Sales rose 37 per cent to HK$24 billion, it added.

Including minority interests, net income in the period was HK$1.13 billion, compared with a net loss of HK$128 million a year earlier.