Business Technology

Thursday 24 May 2018

Hutchison 3G gets €780m cash injection for O2 takeover bid

John Mulligan

John Mulligan

Hutchison 3G's Irish arm has received a €780m cash injection from a newly-formed UK group as it tries to push its planned takeover of O2's operations here over the line. Hutchison 3G has offered to pay €780m for the business.

New filings at the Companies Office show that Hutchison 3G Ireland received €780m within the past three weeks from newly-registered UK firm Hutchison 3G Ireland Holdings.

The transaction was completed on March 24 – just days after 3 Ireland pledged to establish a new mobile operator in an effort to persuade the European Commission to allow it to buy O2 Ireland, which is owned by Spain's Telefonica group.

The Commission has concerns that if 3 Ireland is allowed to buy O2 Ireland that competition in the Irish mobile telecoms market will be reduced.

It's likely that UPC – which already provides fixed-line telephony services on top of its TV and broadband offering – would be the most likely new entrant to the mobile market. It had already been in talks with 3 Ireland about establishing a new mobile service.

Ireland currently has four full-network mobile operators – O2, 3, Vodafone and Meteor.

There are also so-called 'virtual' operators, which sign agreements with the big four to provide their own branded services. Tesco Mobile uses the O2 network for instance.

3 Ireland's concessions to the European Commission will be studied in detail in Brussels and also by rival mobile firms.

Last week, the Commission sought revisions to the concessions proposed by the company, which is part of the Hong Kong conglomerate Hutchison Whampoa.

SHARES

The filings with the Companies Office indicate that London-based Hutchison 3G Ireland Holdings subscribed to 780 million shares in Hutchison 3G Ireland, paying €780m for the shares, which were allotted on March 24. The UK firm was only established in February.

The UK firm's shareholder is Luxembourg-based Hutchison 3G Ireland Investments. Accounts for the Luxembourg firm for 2012 reveal it had outstanding loans paid to an affiliate undertaking amounting to €920.6m at the end of that year. The facilities expire in 2032.

Irish Independent

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