HK Electric changes name to reflect more global ambition
Hongkong Electric Holdings, which yesterday cast away its old brand name for the more international-sounding Power Assets Holdings, says it has Britain's second-largest power grid in its sights.
Managing director Tso Kai-sum yesterday said the company 'was studying bidding documents' and had yet to make a decision on whether to bid for the electricity distribution networks that E.ON of Germany owns in central Britain.
He declined to say whether the group would team up with its immediate holding firm, Cheung Kong Infrastructure Holdings (CKI), to compete for the E.ON assets against rivals - believed to be MidAmerican Energy Holdings and PPL Corp.
CKI, Li Ka-shing's infrastructure flagship, which has also been reported to be bidding for the E.ON assets, has in the past joined Power Assets to buy energy assets in Britain and Australia. CKI did not comment on reports of its bid.
'We have a strong desire to have more power assets abroad,' Tso said. 'In the UK, there are definite regulations that we can follow and we may have a chance to raise our interests in a transparent, straightforward market.'
Explaining the rationale for dropping a name the company has used since it went public in 1976, Tso said: 'The new name reveals our future strategy. We will actively pursue overseas investments. We are looking at projects in other markets such as Australia, Canada and the mainland.'
He said he would miss the old corporate name.
The new company's logo retains part of the red Hongkong Electric symbol.
The company's international business, which comprises 21 projects in power production and distribution and gas distribution, is expected to account for at least half of Power Assets' total earnings within three years, compared with about 30 per cent last year, Tso said.
Its operation in Hong Kong might see an increase in sales of 1 to 2 per cent this year but demand was nearly saturated, he said.
Citigroup global markets research estimates Power Assets' net profit grew 5.45 per cent to HK$7.06 billion last year and will increase 19 per cent this year, driven by newly acquired power assets in Britain.
The group's stake in UK Power Networks, which runs electricity distribution networks in London, southeast and eastern England that were formerly owned by Electricite de France, is expected to contribute HK$254 million to the bottom line last year and HK$1.52 billion this year.
Power Assets and CKI have a 40 per cent stake each in UK Power Networks, with the rest being held by companies linked to the Li Ka-shing Foundation. The deal, completed in November, was worth HK$70 billion.
Power Assets shares climbed 15 HK cents, or 0.3 per cent, to HK$50.10 yesterday.