Li Ka-shing's flagship group, Cheung Kong (Holdings), has called off plans to spin off its extended-stay hotel units into a separate listing, highlighting the grim outlook for capital raisings.

Horizon Hospitality, the IPO hopeful, originally planned to raise as much as US$800 million by listing four hotels that provide a combined 4,833 suites with a gross rental area of 3.32 million square feet. If successful, the company was expected to offer an annual gross yield of 7 per cent under a trustee-manager structure, according to two people familiar with the deal. Cheung Kong spokeswoman Wendy Tong Barnes said there was no concrete [listing] plan to be announced at this stage, but "the company is also considering other options" than going public.

According to sources familiar with the deal, a key investor meeting last week was abruptly cancelled for unknown reasons; but the poor demand for new shares amid valuation concerns was thought to be the reason for the holdup.