RESTRUCTURING
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Cheung Kong

Li Ka-shing's two firms set for merger as Cheung Kong shareholders approve revamp

Favourable vote sees Li Ka-shing's sweeping restructuring plan move closer to completion

PUBLISHED : Wednesday, 25 February, 2015, 8:43am
UPDATED : Thursday, 26 February, 2015, 9:55am

Li Ka-shing's massive restructuring plan for his business empire moved a step closer to completion after Cheung Kong (Holdings) shareholders approved the reorganisation proposed for the company and associate Hutchison Whampoa.

Cheung Kong said nearly 100 per cent of votes from shareholders at a general meeting yesterday morning had been in favour of the plan.

Li - Asia's richest man and the chairman of both Cheung Kong and Hutchison, which have a combined market capitalisation of HK$797.24 billion - announced on January 9 that his two flagship companies' non-property assets, including ports, telecommunications, retail, infrastructure and energy, would be injected into newly formed CK Hutchison Holdings, which was incorporated in the Cayman Islands.

All property businesses, including those overseas, of the two companies would be injected into Cheung Kong Property Holdings, which would seek a stock exchange listing and become one of the city's largest-listed property companies.

Li said earlier that the planned reorganisation, described by analysts as the group's biggest restructuring since 1997, was aimed at unlocking value in both companies.

But the sweeping restructuring - which will switch the incorporated base of Li's companies to the Cayman Islands from Hong Kong - added fuel to rumours that his interest in the city was waning.

Under the restructuring plan, Cheung Kong shareholders will receive one share in a newly registered CK Hutchison Holdings (CKH Holdings) for every Cheung Kong share, while CKH Holdings will offer Hutchison shareholders 0.684 of a CKH Holdings share for every Hutchison share. All eligible CKH Holdings shareholders will receive one CK Property share for every CKH Holdings share.

The plan also requires approval by the independent shareholders of Hutchison.

Victor Li Tzar-kuoi, deputy chairman of Cheung Kong, said he did not expect all Hutchison shareholders would approve it.

But in general, shareholders applauded, Cable TV quoted Victor Li as saying at the general meeting. Li Ka-shing did not reveal his retirement plan but said he would retire one day. "Working time is limited … this is regrettable," he said.

Assuming Hutchison shareholder approval is forthcoming, the deal is expected to close in June.

Shares of Cheung Kong and Hutchison Whampoa rose modestly yesterday.

Cheung Kong rose about 0.46 per cent to HK$152 and Hutchison rose 0.76 per cent to HK$105.60. Shares of the two companies were suspended from trading yesterday morning before the general meeting of Cheung Kong shareholders. They resumed trading at 1pm after the result of the vote was announced.

Cheung Kong will announce its full-year result for 2014 today.

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