Citic Pacific shareholders approve landmark deal

Citic Pacific shareholders have voted almost unanimously for the company to buy nearly all the assets of parent firm Citic Group, cementing a landmark 227 billion yuan (HK$281 billion) deal that has been touted as the start of a new wave of reform of state-owned enterprises.

At an extraordinary general meeting held in Hong Kong yesterday, more than 99 per cent of the shareholders of Citic Pacific supported the jumbo acquisition and the sale of new shares, the company said in a statement to the stock exchange.

The deal will be the largest capital injection by a state-owned company into a Hong Kong-listed unit.

After the vote yesterday, Citic Pacific chairman Chang Zhenming, who also heads Citic Group - the country's largest investment firm - said it planned to complete the acquisition by the end of August.

Although most shareholders approved the deal, some minority investors, who would see the value of their holdings diminished by the issuance of new shares, expressed disappointment with the persistent weakness of Citic Pacific's share price.

Two investors, who bought their shares at about HK$40 each seven years ago, said nobody knew if the acquisition could help revive the company's share price.

Citic Pacific shares closed 0.15 per cent lower yesterday at HK$13.52. The stock hit a record high of HK$49.60 in September 2007, about a year before it announced US$2 billion in losses on hedging exposure to the Australian dollar.