Cash-strapped Hutchison 3G has been given a helping hand by NTT DoCoMo to the tune of a £200m sterling loan to keep its UK and Italian start-up operations on track.
However, a decision is still looming over whether the firm will manage to get the US$1bn cash injection it requested from its three parent firms last month.
Hutchison 3G, which launched its ‘3’ network in the UK and Italy last month, has been compromised by cash problems and recently called on its three parents – Hutchison Whampoa, NTT DoCoMo and KPN – for a £1bn loan. Hutchison 3G already owes the banks £1bn sterling, drawn down from a £2bn sterling credit line arranged in 2001.
The £200m sterling loan is part of a broader plan to convince the banks to inject the much-needed £1bn loan into the business. However, according to reports, no decision has yet been reached by the banks.
Hutchison 3G has been not only beset with cash problems since launching over a month ago, it has had to contend with software glitches and handset shortages that may obscure its plans to have two million customers in both Italy and the UK by the end of this year.
The company wants the banks to extend the £2bn loan, which matures next year – for a further year as well as revise its loan conditions. It argues that delays in launching its services have affected its revenue prospects for the year.
By John Kennedy
