State Grid stake in HK Electric Investments key to future deals

Power Assets, the international utility firm controlled by Li Ka-shing, says an investment of up to HK$10 billion in its HK Electric Investments spin-off by State Grid of China opens the door to future co-operation in deals outside the city.

Canning Fok Kin-ning, the chairman of Power Assets and HK Electric, a trust company being spun off in a separate listing, said HK Electric had no plans to expand outside the city after the offering of its trust units.

But he did not rule out co-operation between state-owned State Grid and Power Assets or sister firm Cheung Kong Infrastructure, which is also controlled by Li.

"We hope to build good relations with State Grid [through its being a cornerstone investor in HK Electric]. As to other things [such as possible co-operation], they are matters of the future," Fok said, without elaborating.

HK Electric's listing document said its directors intended for it to engage solely in the power business in the city, but the firm's memorandum and articles of association do not explicitly restrict the scope of its business.

State Grid, the monopoly power distributor in 26 mainland provinces and regions, has pledged to buy 35.9 per cent of the 4.43 billion trust units on offer, or 18 per cent of the entire trust firm.