Li Ka-shing’s Power Assets to IPO HK Electric

Hong Kong Billionaire Li Ka-shing controls Power Assets Holdings Ltd, an investment entity that invests in power and utility-related businesses. The business magnate is seeking to sell local regulated assets in favor of overseas regulated assets in Australia, Europe and parts of Southeast Asia.

Li is seeking to spin off Hongkong Electric Company, Hong Kong’s number #2 power supplier, into a single-investment trust. Having HK Electric structured as an investment trust will attempt to soothe investors since excess cash is pledged to be paid out in dividends. Starting operations in 1890, Hongkong Electric Company is an electricity duopoly. Li reduced the offering size of HK Electric, presenting a 50.1% stake versus the previously idea of 70%. This puts HK Electric’s offering at HK$ 27.91 billion.

Cornerstone Investors
Government-owned State Grid Corporation of China, China’s largest power distributor, will invest HK$ 10 billion for an 18% stake in HK Electric. In addition, the Oman Investment Fund will acquire a stake for HK$ 387.5 million.

Joint sponsors for the HK Electric listing include HSBC Holdings Plc and Goldman Sachs Group Inc.

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