Vodafone Hutchison Jumps for a Bigger Lifeboat

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One of the longest stalemates in Australian corporate history could be nearing a resolution. Vodafone Hutchison Australia Pty, the joint venture between Vodafone Plc and a unit of Victor Li’s CK Hutchison Holdings Ltd. that runs the nation’s third-largest mobile network, is in talks to merge with homegrown challenger TPG Telecom Ltd., the companies said in statements Wednesday. That would be a merciful outcome for Vodafone Hutchison, which was created in 2009 through a 50-50 merger of the two operators’ local businesses and has racked up about A$3 billion ($2.2 billion) in net losses since 2012 alone, Bloomberg News reported. The company has been in a form of limbo for years, with neither side willing to sell out for a price the other would accept and a resulting lack of clear leadership that’s left it saddled with an insolvent balance sheet. Its Ebitda, at about A$976 million in 2017, is greater than TPG’s A$835 million, but with A$7.57 billion in net debt Vodafone Hutchison will be doing very well if it gets an equity value of more than A$1 billion in any deal. Read more.