Three Hong Kong-listed Lippo group companies have begun a three-month restructuring programme which could see their parent selling 10 per cent of its property arm to mainland-backed companies, sources say.
Indonesian-based Lippo has three listed companies in Hong Kong - Lippo Ltd, HKCB Bank Holding Co and Hongkong China.
It is understood Lippo is considering the strategic sale of a stake in property company Hongkong China to mainland companies, including Bank of China and China Resources (Holdings).
The first move in the restructuring was made yesterday when China Resources' Hong Kong-listed arm, China Resources Enterprise (CRE), set up a 50-50 joint-venture with Lippo which will own 75 per cent of HKCB Bank Holding Co, the listed company which owns unlisted Hongkong Chinese Bank.
South China Brokerage research director Howard Gorges said: 'It's very possible CRE will spin off Hongkong Chinese Bank in the long run.' The sources said the next stage in the restructuring would involve Lippo reinforcing its mainland connections by offering mainland companies a slice of its property arm.
'Under the current plan, Lippo may sell about 5 per cent [in Hongkong China] to Bank of China and another 5 per cent to China Resources to reinforce the company's guanxi,' the sources said.
Tying up with two powerful mainland players would strengthen considerably Lippo's deal-making ability on the mainland, analysts said.
