HONG KONG -- Shares of PCCW rebounded on Tuesday for the first time in four trading days in Hong Kong, after the company announced a 300 million-pound ($373 million) deal to sell a U.K. broadband business.
Shares of the Hong Kong communications company at one point rose 0.11 Hong Kong dollars, or 2.32%, to HK$4.850 in morning trading. The company said after the previous day's market close that it had agreed to sell its entire stake in the U.K. business to CK Hutchison Holdings, prompting hopes that the divestiture proceeds would boost PCCW's earnings.
Many investors also viewed the sale as making sense.
According to the announcement, PCCW will sell its holdings of issued shares in Transvision Investments -- which in turn holds all shares in UK Broadband, the U.K. broadband operator -- to Hutchison 3G UK, a wholly owned subsidiary of CK Hutchison Holdings.
Transvision suffered an unaudited consolidated before-tax net loss of HK$224 million in 2016.
PCCW said in the announcement that the sale of Transvision "represents a good opportunity for the Group to realize and unlock the value" of the U.K. broadband business, adding that the group will also be able to focus its resources and efforts on its main segments, such as media and solutions businesses.