New | Li Ka-shing’s Cheung Kong seeking up to HK$55 billion in loan for new property firm

Cheung Kong Holdings Ltd. is seeking a loan of as much as HK$55 billion (US$7.1 billion) as billionaire Li Ka- shing reorganizes his corporate empire, according to five people familiar with the matter.

The funds will be used to acquire property assets after the 86-year-old tycoon proposed January 9 to reorganize his two main companies, Cheung Kong and Hutchison Whampoa Ltd., according to the people, who asked not to be identified because they’re not authorized to speak publicly.

As part of the changes, a newly formed company Cheung Kong Property Holdings Ltd. will obtain the real-estate assets of both firms for HK$55 billion, according to a Hong Kong Stock Exchange filing on January 9.

The loan will be Hong Kong’s biggest syndicated deal since the $12 billion transaction used to back PCCW Ltd.’s takeover of Cable & Wireless HKT Ltd. in 2000, data showed. The Hong Kong-based real estate company is in talks with its relationship banks including Bank of America Corp., BNP Paribas SA, China Construction Bank Corp. and HSBC Holdings Plc for the loan, the people said.

CK Property will buy the assets using either a bridge facility, for which HSBC will pledge HK$45 billion and Bank of America HK$10 billion, or a syndicated loan, according to the January 9 filing.

Cheung Kong is requesting banks to commit to a new, long- term loan through CK Property, according to the people. The company has conveyed some information to banks and is expected to send more specific instructions, the people said.