Hutch Tel to earn $ 9.6 bln gain on India sale

HONG KONG, Feb 13 (Reuters) Hutchison Telecommunications International Ltd. said on Monday it would earn a pretax profit of US.6 billion from the sale of a 67 percent stake in India's No. 4 cellular operator to Britain's Vodafone Group Plc. .

The Hong Kong company said it had not made a final decision on its use of the proceeds from the US.1 billion deal for Hutchison Essar.

Subject to a review of its capital needs, it said it aimed to reduce debt and pay a special dividend to shareholders as well as to invest in existing and new markets and use the rest for general working capital.

Hong Kong conglomerate Hutchison Whampoa Ltd. owns nearly 50 percent of Hutchison Telecom, while Egypt's Orascom Telecom owns 19 percent.

Shares in Hutchison Telecom, which have risen 28 percent since the start of November in anticipation of the Indian sale, were suspended on Monday, and the company said it had applied for them to resume trading on Tuesday. The company's New York-listed shares have not been suspended, a spokeswoman said.

The Indian business is Hutchison Telecom's biggest and most valuable asset, and it was put up for sale only after plans for a listing of Hutchison Essar fell apart amid disagreement between Hutchison Telecom and India's Essar group, which owns the remaining 33 percent of the group.

Hutchison Telecom said in a statement on Monday it would continue a strategy of operating in markets including Hong Kong, Israel, Indonesia and Vietnam.

Hutchison Telecom Chairman Canning Fok called the deal, which needs shareholder approval, a ''landmark transaction''.

''Together with our partners, the Essar Group, we have built a truly great company in Hutchison Essar, and this has been reflected in the price we have achieved today. It represents a sizeable premium on the company's investment and unlocks substantial value for our shareholders,'' he said.

REUTERS PV DS1300