Guangdong Investment (GDI), a Hong Kong-listed arm of the Guangdong provincial government, plans to divest its hotels by spinning them off or selliug them to its parent.
Chairman Li Wenyue said yesterday the company might swap the hotels in Hong Kong and China for infrastructure facilities owned by parent GDH Limited, which holds 62.58 per cent of GDI.
'We are not talking about selling them to a third party. It will be a spin-off or asset swap with the majority shareholder,' Mr Li said.
GDI's hotels include the Wharney Guangdong Hotel and Guangdong Hotel in Hong Kong, Guangdong Hotel in Shenzhen, Yue Hai Hotel in Zhuhai and several budget hotels on the mainland. The company is still assessing the market value of the hotels.
The company reported revenue of $254 million, or 4.85 per cent of total revenue, from hotel management in December last year. Hotels are not among GDI's core businesses which include water supply, electricity generation, toll roads, bridges and department stores.
Mr Li said the company expected a major improvement in electricity generation this year following a profit plunge last year. The power business reported a pre-tax gain of $1.3 million last year, down 87 per cent from 2004.