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Last Updated: Friday, 7 November, 2003, 18:20 GMT
Hutchison settles row with KPN
Close up of 3G phone
A row between the owners of the UK's first national 3G mobile phone network, 3 UK, has been settled.

Hong Kong conglomerate Hutchison Whampoa had begun legal action against one of its partners in the project, Dutch firm KPN, earlier this year.

Hutchison was unhappy after KPN refused to provide a 150m loan for the UK business.

But now Hutchison has agreed to buy KPN's 15% stake in the project for 90m.

Legal battle

In April this year, the 3 UK network asked its shareholders for 1bn of loans to help fund the roll-out of the new system.

Hutchison is happy to put this dispute behind us and increase our interests... at a very attractive price
Canning Fok, Hutchison managing director
Hutchison provided 650m and Japan's NTT 200m, in proportion to their 65% and 20% stakes in the company.

But KPN refused to provide its share because it said the agreement under which it owned 15% of 3 did not require it to lend the money.

The Dutch firm had already written-off the value of its stake in 3 UK and offered it for sale last year.

Hutchison began legal proceedings against KPN in June, and KPN promptly countersued demanding that Hutchison bought its 15% stake in 3 UK at 140% of its value.

'Excellent transaction'

The settlement came just in time, as the two sides were due to meet in court on Monday.

"Hutchison is happy to put this dispute behind us and increase our interests... at a very attractive price," said Hutchison managing director Canning Fok said in a statement.

"This represents an excellent transaction for us."

Analysts welcomed the agreement.

"Resolving this without getting a judge involved should be good for both parties," said Effectenbank Stroeve analyst Philip Scholte.

"KPN should be especially happy because they get some cash back and won't have to put as much as 150m into a company they clearly don't believe in."


SEE ALSO:
Hutchison upbeat on 3G prospects
21 Aug 03  |  Business
$2.26bn Dutch telecom sell-off
19 Sep 03  |  Business
Hutchison sues UK 3G partner
11 Jun 03  |  Business
UK 3G firm loses 150m loan
25 Apr 03  |  Business


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