PCCW (00008.HK) and Hong Kong Telecom (06823.HK) jointly announced that Apex Link Communications, an indirect wholly-owned subsidiary of Hong Kong Telecom, sold 40% equity and accounts receivable of target company Regional Link Telecom Services to Magic Investment Bidco, a subsidiary of China Merchants Group, for a total consideration of USD 870 million, which will be settled in cash. The proceeds will be used for general corporate purposes, including debt repayment.

After completion, the target company will still be an indirect subsidiary of Hong Kong Telecom, i.e. an indirect subsidiary of PCCW.

Hong Kong Telecom believes that the above transaction will allow it to release the value of its extensive passive network business by introducing investors as long-term partners and share future capital expenditures related to business growth. With the planning of new residential development areas in Hong Kong, the acceleration of corporate digital transformation, and the increasing integration of the Greater Bay Area, the wholly-owned subsidiary Passive Netco of the target company will work with Hong Kong Telecom and investors to expand its passive infrastructure business to support the launch of new service projects and expand into new regions.