Hutchison Whampoa denies it plans to quit Hong Kong amid speculation over possible ParknShop sale
Li Ka-shing's group confirms strategic review of ParknShop amid speculation of US$2b sale, but dismisses rumours it is withdrawing from city
Billionaire Li Ka-shing's conglomerate Hutchison Whampoa said yesterday it had no intention of withdrawing from Hong Kong, despite launching a review that could lead to the sale of its ParknShop supermarket chain.
It said a subsidiary, A.S. Watson & Co, was conducting a strategic study of the business "to optimise value for shareholders".
But it stressed that media rumours that it may be pulling out of the city were "groundless".
Leaving his home yesterday morning, Li referred to the review, saying: "It is a normal business activity."
But in response to questions from reporters, he denied it was related to the political situation or public opinion of Chief Executive Leung Chun-ying. He added: "Please do not speculate."
According to a report in The Wall Street Journal on Friday, the ports-to-telecoms conglomerate has hired investment banks Goldman Sachs and Bank of America/Merrill Lynch to sell ParknShop for up to US$2 billion.
The group decided last month to sell the chain to raise cash to help it through one of the most challenging business environments for years, the report said.
But the group said yesterday it had not yet set a definite timetable for completing the review and the process did not necessarily mean there would be a sale.
A ParknShop spokeswoman confirmed an earlier media report that a change would be made next month to the name of the employer on the work contracts, from A. S. Watson & Co to ParknShop (HK). But employment terms and conditions would not be affected, she said. ParknShop and its rival Wellcome, owned by Dairy Farm International Holdings, have more than 70 per cent of market share in the city.
ParknShop operates 345 stores - more than 270 of them in Hong Kong - and employs about 13,000 staff in Hong Kong, Macau and on the mainland.
The supermarket chain reported revenue of HK$21.7 billion last year, which contributed 5.4 per cent to Hutchison Whampoa's overall figure.
But the report in The Wall Street Journal said Li planned to exit the grocery store market partly because it is "mature and growing slowly".
Secretary for Development Paul Chan Mo-po dismissed talk of a connection between a possible sale and the administration's performance as "speculation".
New People's Party lawmaker Regina Ip Lau Suk-yee, an executive councillor, said the enforcement of the Competition Ordinance - and the work on implementing standard working hours and universal suffrage - might have raised fears among some in the commercial sector.
She believed the ParknShop review was solely a commercial consideration.