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ITC cuts back stake in builder

INTERNATIONAL Tak Cheung Holdings (ITC) is to sell 50 per cent of its construction operations, which include the Paul Y construction company, to Cheung Kong (Holdings) and a subsidiary of Hutchison Whampoa for $76.5 million.

The sale comes less than a year after ITC took full control of Paul Y and said it would build itself into a regional infrastructure developer.

Paul Y claims to be the only construction company given permission to operate throughout China and is one of the best known construction companies in the territory.

After the deal, Cheung Kong will own 40.1 per cent of a holding company known as Paul Y-ITC Construction Holdings and HutchVision will own 9.9 per cent.

The agreement contains a clause allowing the buyers to force ITC to buy back their stakes at cost plus interest during the first three months of ownership.

The holding company includes all of ITC's construction operations and the buyers will pay in full in cash on the completion date of February 23.