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Hutchison Australia’s AU$2.85 Billion Share Offer

Hutchison Australia (ASX:HTA) will raise $2.85 billion (US$2.35 billion) in a share issue after shareholders voted for it at an annual meeting. Hutchison will “offer existing shareholders 20 convertible preference shares for each ordinary share at 21c apiece in a capital raising aimed at reducing a debt burden that stands at $3.6 billion” (US$2.97 billion), reports the Sydney Morning Herald. The interest bill has climbed to AU$22 million (US$18.14 million) per month…

Shareholders were upset at the absence at the annual meeting of four senior executives from Hutchison Whampoa, the controlling shareholder, as Hutchison has admitted the share issue could result in Hutchison Whampoa increasing its stake from 58 percent to almost 98 percent of the Australian company if the preference shares are converted in two years’ time.

Hutchison still makes a loss and CEO Nigel Dews would only commit to a goal of becoming “operating cash flow positive” by the end of the year, and claimed that Hutchison Australia is “performing at the top end of the pack” of Hutchison’s efforts around the world. The share price has fallen from $5 in 1999 to 17.5c now.

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May 7, 2007 - Posted by | Mobile events, Mobile games

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