Moody's affirms Hutchison Whampoa

Moody's Investors Service said it has affirmed the A3 debt rating for Hutchison Whampoa Ltd. in response to the proposed disposal of its 20% stake in Proctor & Gamble-Hutchison Ltd. for US$2 billion. The outlook remains negative.

P&G-H, a joint venture between Hutchison and Proctor & Gamble, is engaged in manufacturing and distributing consumer products in China. Subsequent to the disposal, P&G will become the sole owner of P&G-H.

Moody's said the rating affirmation reflects Moody's view that the cash proceeds of US$2 billion, to be received upon completion of the transaction in June 2004, will moderately enhance Hutchison's financial flexibility.

Moody's understands the disposal will have minimal impact on Hutchison's recurring operating cash flow. The rating agency also recognizes that the disposal further demonstrates Hutchison's ability to monetize some of the hidden value in its balance sheet.

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