LONDON - Hong Kong conglomerate Hutchison Whampoa, which owns 80% of Britain's Hutchison 3G UK (H3G), is set to buy 1.5 billion pounds ($2.76 billion) of the latter's debt. Hutchison has said, however, that the deal will only go through if it can reach better repayment terms with its creditor banks than the original ones.

The plan is to buy back some of the $4.52 billion in bank loans that H3G, in which NTT DoCoMo owns the remaining 20%, received over three years beginning in 2001. The loans were scheduled to be repaid this month, but the repayment deadline has been pushed back a year. The interest rate on the loans is LIBOR + 2.25%. Hutchison hopes that banks will agree to reduce the interest rate, given that market rates have fallen significantly in recent years.

Hutchison, which already provides third-generation (3G) services in Italy, the UK, Austria, Sweden and Australia, among others, is majority owned by Li Ka-shing, Asia's richest businessman. In Hong Kong, the group has interests in almost every sector, including trade, industry, energy, hotels, real estate and telecommunications. It also owns major seaports and real estate. The group's liquid assets as of July last year amounted to $21.2 billion.

A Hutchison spokesman said the group would buy the loans directly from the lending banks and would not invest in H3G. It is unclear whether NTT DoCoMo would participate in the H3G debt buyout.

The British company is under constant attack from investors and analysts who believe that its strategy to launch third-generation telephony has been a failure. The task of selling a new expensive product in a market that is still developing rather slowly and is experiencing a shortage of handsets has proven to be too much for the company, experts say.

Hutchison only began offering the long-promised service in Hong Kong at the end of January this year. It soon slashed its rates to boost demand. Now you can buy an NEC c616 mobile videophone there for $130, provided you sign an 18-month service contract. NEC is the main supplier of equipment to NTT DoCoMo, which has launched the world's first 3G network. (FT, 9. 03. 2004, Kirill Koryukin)

Hutchison is going to get into debt