Telco giant PCCW’s attempt to sell its phones and media interests has become a victim of the global financial crisis.

The Hong Kong company controlled by Richard Li Tzar-kai called off the auction for HKT Group Holdings on Sunday.

In a statement to the stock exchange it said: “The company received substantial interest in HKTGH and formal proposals from several bidders. However, the recent market downturn has significantly impacted the offers received, and the board, having carefully considered these proposals, has unanimously decided to discontinue the auction process. The board concluded that the offers were not sufficiently attractive.”

PCCW previously tried to spinoff its telco and media units only to have the sale blocked by Chinese authorities and Singaporean minority shareholders. Over the summer it restarted the disposal process and hoped to realize up to $2.5 billion from the sale of a 45% stake in HKTGH.

It short-listed seven bids in August, but according to local media the consortia have since lowered their offers with one tender reportedly as low as $450 million.

Twin problems appear to be private equity funds’ inability to raise debt finance and the recent sharp slide on world stock markets which has raised doubts about valuations of several asset classes.

PCCW’s HKTGH includes the world’s pioneering IPTV group Now Television, which this year overtook its cable rival to become Hong Kong’s leading pay TV platform.