TCL International Holdings Ltd. (1070.HK) said Monday it expected TCL group's mobile handset arm to formally establish a joint venture with France's Alcatel SA (ALA) by the end of August.

TCL Communication Technology Holdings, the holding company of handset maker Huizhou TCL Mobile Communication Co., is due to be listed in Hong Kong after the joint venture is in operation.

TCL International owns 40.8 percent of Huizhou TCL Mobile while TCL International's parent, Shenzhen-listed TCL Corp. (000100.SZ), has 36 percent. TCL Corp. owns around 55 percent of TCL International.

When the handset operation applied for its listing in early April, it did not provide a time frame, size or structure for its initial public offering. However, TCL International said it may distribute some of the mobile handset business' stock to its shareholders in the form of dividend.

Market sources have said the IPO, worth about US$200 million, could take place around the middle of this year.

On Friday, TCL Communication and Alcatel signed a formal agreement to set up a EUR100 million joint venture, after the two companies signed a memorandum of understanding in late April.

TCL Communication will contribute EUR55 million worth of cash to the joint venture, while Alcatel will inject funds and its entire worldwide mobile handset business for a total net asset value of EUR45 million.

TCL Communication will own 55 percent of the joint venture while Alcatel will have a 45% stake.

Editor: Donald