Investors give nod to Power Assets spin-off

Power Assets, an international utilities firm controlled by Asia's richest man, Li Ka-shing, said its shareholders had approved a proposed spin-off listing of its Hong Kong electricity arm, paving the way for a fund-raising scheme worth up to HK$44.4 billion.

A handful of minority shareholders had opposed the separate listing and management had explained the benefits of floating the assets to them, Power Assets chairman Canning Fok Kin-ning said after the poll at a shareholders' meeting yesterday.

More than 99.7 per cent of Power Assets' shareholders voted to approve the deal, the firm said in a statement submitted to the Hong Kong stock exchange.

Bankers said the company had started to pitch the trust deal, which should pay an annualised return of 5.5 to 7.3 per cent, to selected institutional investors, with a formal roadshow next week.

Pricing is expected to be announced on January 22, with trading scheduled to begin a week later.

Market views on the proposed spin-off listing are fairly divided. A number of long-term investors expressed concern about earnings dilution after the listing of the Hong Kong assets - the biggest contributor to Power Assets' earnings - following persistent weakness in the company's share price since it announced the deal in September.

Adding to concerns about the deal, market analysts cited the unattractive yield from mature assets and Li's track record in selling his port assets through a US$5.5 billion trust listing in Singapore. Shares of Hutchison Port Holdings Trust have plunged 34 per cent since it went public in March 2011.