Link relisting won't favour previous investors

PUBLISHED : Wednesday, 07 September, 2005, 12:00am
UPDATED : Wednesday, 07 September, 2005, 12:00am

The Link Reit listing will be relaunched in December, but the successful subscribers to the privatisation shelved last December will not enjoy priority over first-time investors, government sources said yesterday.

They cited the sheer number of subscribers - more than 500,000 - and the difficulty in tracking all of them down as the main reasons for deciding against preferential share allocations.

Secretary for Housing, Planning and Lands Michael Suen Ming-yeung has previously expressed reluctance to grant preferential treatment to investors in the real estate investment trust.

Mr Suen, who announced the December listing yesterday, gave few details. He said the reit's valuation, yield, pricing and share allocation arrangements would be announced as the listing date drew nearer.

A prospectus, including disclosure of the offering's legal risks, will be available by November.

Mr Suen said: 'We believe that we can overcome legal challenges by making suitable disclosures. We do not feel that these disclosures will dampen investor enthusiasm for the Link Reit.'

Walter Chan Ka-lok, chairman of the Housing Authority's home ownership committee, said the assets being privatised were unchanged from last year's listing: 29 car parks, 149 shopping centres with car parks and two without - all of them on public housing estates. The assets were valued at nearly $31 billion for last year's listing.

The government and investors were stunned by an 11th-hour court challenge from two elderly public housing tenants to the listing last year. When the Court of Appeal refused to shorten the time allowed the pair to seek leave to appeal against a lower court's rejection of their challenge, the government withdrew the initial public offering.

The Court of Final Appeal later ruled in favour of the government.

Lawmaker Albert Chan Wai-yip is examining whether the privatisation requires the government to consult the Legislative Council before proceeding. Failure to do so could amount to a breach of the Public Finance Ordinance, he said. However, Eric Cheung Tat-ming, University of Hong Kong associate law professor, does not see any viable legal challenges to the relaunch of the reit.

Ronald Wan Ten-lap, SBI E2-Capital executive director, said it was likely the authority had already started marketing the offering to institutional investors.