Li Ka-shing’s two major companies announce restructure plan

 

 

 

Li Ka- shing.   Photo – Internet

 

 

 

Li Ka-shing’s

two major companies

announce restructure plan

 

By Wang Xin and Yan Hao

 

Hong Kong’s leading multinational corporations Cheung Kong Holdings and Hutchison Whampoa on Friday of January 9 announced a merge and reorganization plan to restructure their operations into two new companies respectively specializing in real estate business and all other non-real estate businesses.

The two super international conglomerates are the main pillars of the family businesses owned by Hong Kong’s wealthiest man Li Ka- shing.

The two new companies, CK Hutchison Holdings Limited (CKH Holdings) and Cheung Kong Property Holdings Limited (CK Property), will be listed on the Hong Kong bourse.

CKH Holdings will hold all of the non-property businesses of Cheung Kong and Hutchison Whampoa, including ports and related services, telecommunications, retail, infrastructure, energy and movable assets leasing operations (aircraft leasing).

CK Property will combine the property businesses of Cheung Kong and Hutchison Whampoa in Hong Kong, the Chinese mainland and overseas.

Commenting on the transaction, Li said it is a watershed event in the Group’s history. “It is transformational from the point of view of shareholder value. Cheung Kong and Hutchison have grown substantially in size and scale over the past decade.”

Li said the reorganization proposed on Friday will place the companies in an even stronger position for future growth and development.

“This transaction is expected to create significant value for shareholders through the elimination of the holding company discount, which will be shared by Cheung Kong and Hutchison shareholders,” Li said.

“The distinct business profiles of CKH Holdings and CK Property will enable investors to better value the underlying businesses of the Groups and may lead to further value enhancement in the future, ” Li added.

According to Li, subject to all required approvals being obtained and the fulfillment of all conditions precedent, it is expected that all the proposals will be completed around the end of the first half of 2015.

After completion of the proposals, CKH Holdings will be a multinational conglomerate of significant size and scale, operating in over 50 countries, according to the announcement.

Meanwhile, CK Property will be one of the largest property companies listed in Hong Kong with a leading market share in Hong Kong, strong penetration in the mainland as well as an international presence.

According to the announcement, Cheung Kong and Hutchison Whampoa will be merged into a new holding company, which will be incorporated in Cayman Island.

“About 75 percent of listed companies in Hong Kong are incorporated in Cayman Island, including state-owned enterprises. We just follow the trend,” Li said.

 

 

 

 

Li Ka-shing:

Hong Kongers would be big losers

if constitutional reform makes no headway

 

By Tai Beipiing

 

Hong Kong’s richest tycoon Li Ka- shing said on Friday of January 9 that all Hong Kongers, including himself, would be big losers if the constitutional reform makes no headway.

He said the Legislative Council should pass the constitutional reform package so that progress could be made for Hong Kong’s constitutional development, and warned that the damage could be immeasurable if the reform process comes to a halt.

Li told reporters he attaches great importance to this issue as the constitutional reform is a very rare opportunity. Hong Kongers should not be made losers, he said.

He added that only the passing of the constitutional reform package by the Legislative Council could grant people in Hong Kong their rights to make choices, and elect their chief executive in a “one person, one vote” manner.

 

 

 

 

 

 

BACKGROUNDER

 

Li Ka-shing’s business empire

 

By Jiang Tingting

 

Hong Kong’s richest man Li Ka- shing has revamped the holdings of his two flagship companies, Cheung Kong Holdings and Hutchison Whampoa, in an effort to create better value for shareholders.

The two new companies, CK Hutchison Holdings (CKH) and Cheung Kong Property Holdings (CK Property), will be listed on the Hong Kong bourse.

CKH will hold all of the non-property businesses of Cheung Kong and Hutchison Whampoa, including ports and related services, telecommunications, retail, infrastructure, energy and movable assets leasing operations (aircraft leasing).

CK Property will combine the property businesses of Cheung Kong and Hutchison Whampoa in Hong Kong, the Chinese mainland and overseas.

 

Following are the major events of Li Ka-shing’s business empire:

 

In 1950, Li founded a plastic manufacturing company in Hong Kong with 50,000 HK dollars (6,452 U.S. dollars) borrowed from family and friends.

In 1958, Li entered the property market by purchasing a 12- story building in North Point, Hong Kong. The building was named Cheung Kong Building.

In 1972, Cheung Kong Holdings was publicly listed on the Hong Kong Stock Exchange. The company invested massively in Hong Kong’s property market over the past four decades and has become one of the major developers in Hong Kong.

In 2013, Cheung Kong Holdings and partners bought AVR Afvalverwerking BV from Van Gansewinkel Groep BV for 943.7 million euros (1.3 billion U.S. dollars) to add waste processing in Europe. The deal gave Li control of AVR Afvalverwerking BV, which boasts the largest waste treatment capacity in Europe.

In 2014, Cheung Kong Holdings paid 1.89 billion U.S. dollars to buy 35 planes from companies including General Electric Co’s aviation services unit to enter the aircraft leasing market.

Net assets of Cheung Kong Holdings stood at 390.8 billion HK dollars at the end of June in 2014. It is currently a leading multinational conglomerate which operates in over 50 countries and employs more than 280,000 staff worldwide.

Originally Hutchison Whampoa was two separate companies, both founded in the 19th century. Hong Kong and Whampoa Dock was established in 1863, and Hutchison International was formed in 1877.

In the 1960s, Hutchison International gained a controlling interest of Hong Kong and Whampoa Dock, and in 1977 Hutchison acquired all of Hong Kong and Whampoa Dock, creating Hutchison Whampoa.

Although Hutchison Whampoa had a large portfolio of valuable real estate interests, in docks and retail ventures, the company eventually ran into trouble. It was rescued by HSBC, with the bank taking a 22-percent stake in the company.

In 1979, HSBC sold its stake in Hutchison Whampoa to Cheung Kong Holdings for 639 million HK dollars. Li Ka-shing began to serve as chairman of Hutchison Whampoa in 1981.

The company is currently a multinational conglomerate which employs over 270,000 people in over 50 countries across the world. It owned 7.15 million square meters of land reserve in the Chinese mainland and 5,320 hotel rooms worldwide at the end of November 2014.

 

 

 

 

 

 

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