Li Ka-shing offloads more HK assets with US$5bn Hong Kong electricity business spin-off; Wang Shi, chairman of China Vanke, the mainland’s larges residential real estate developer, posted on his microblog that Li offloading assets in Guangzhou and Shanghai is a signal that investors need to start being very careful.

October 1, 2013 Leave a comment

Li Ka-shing offloads more HK assets with US$5bn spin-off

Staff Reporter

2013-09-30

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The recent decision by Asia’s richest man, Li Ka-shing, to spin off his Hong Kong electricity business has added to the unease of investors who believe the tycoon has lost faith in the future of the Hong Kong and mainland Chinese economies. Li, the 85-year-old chairman of Cheung Kong Holdings and Hutchison Whampoa, announced that Power Assets Holdings — which he controls — will spin-off subsidiary Hongkong Electric Company in a joint listing of shared staple units valued at an estimated 30.5 billion yuan (US$5 billion). Power Assets will hold less than 50% but more than 30% of HK Electric’s shares following the deal.HK Electric, which started operations in 1890, provides electricity to about 568,000 customers on Hong Kong and Lamma islands.

Although Li declared as recently as Sept 17 that he loves Hong Kong and would never leave the territory, he has been frantically pulling out assets from Hong Kongand the mainland.

Reports claim that in addition to plans to sell-off Hong Kong supermarket chain ParknShop, Li intends to unload around 41 billion yuan (US$6.7 billion) in assets from Hong Kong and mainland China.

The flurry of activity has led to speculation that Li has lost confidence in the future of the Hong Kong and Chinese economies. Li suggested recently in an interview that irrespective of his personal views his priority remains the interests of his shareholders.

A spokesperson for Li said that the decision to spin-off HK Electric was a pure commercial decision and should not be seen as Li withdrawing capital from Hong Kong.

Wang Shi, chairman of China Vanke, the mainland’s larges residential real estate developer, posted on his microblog that Li offloading assets in Guangzhou and Shanghai is a signal that investors need to start being very careful.

Filed under Investing Process, Macro Trends

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