CK Hutchison Group Telecom Holdings will boost its credit profile following the merger of its UK subsidiary Three with Vodafone, despite a reduction in business diversity, S&P Global Ratings said in a Thursday release.
The deal will lower the telecom company's pro-forma adjusted net debt to EBITDA to 2.8x in 2025 from 3.2x in 2024, aided by 1.3 billion pounds in net proceeds earmarked for debt reduction, according to the rating agency.
The improvement should offset the increased profit concentration in the competitive Italian market, S&P said.
Meanwhile, the merger's effect on the net debt to EBITDA of parent CK Hutchison Holdings (HKG:0001) will be minimal at 3.3x.
CK Hutchison Group Telecom Holdings' continued significant EBITDA contribution to its parent, exceeding 25% by 2026, reinforces its strategic importance to the group, the rating agency said.
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