Owner of Canada’s Husky to put HK$7 billion into the company
Hong Kong billionaire Li Ka-Shing will take a majority stake in Canadian oil producer’s pipelines.
Husky Energy’s controlling shareholder Li Ka-Shing will pay C$1.15 billion (HK$7 billion) for a majority stake in some of the Calgary, Alberta-based oil producer’s pipelines in western Canada.
Cheung Kong Infrastructure Holdings Ltd.,(CKI) and Power Assets Holdings Ltd., (PAH), both part of Hong Kong billionaire Li’s corporate empire, are together buying a 65 per cent stake in the midstream assets. Husky wants to shore up its finances in the worst oil market downturn in decades.
Benchmark Brent crude prices were around US$65 a year ago. They fell as low as US$28.76 in January, according to Bloomberg data. US crude averaged $33.63 a barrel in the first quarter, down from $48.57 a barrel in the same period of 2015.
CKI, PAH and Husky have entered into the investment agreement in relation to, among other things, forming the joint venture HMLP, according to a filing by CKI to the Hong Kong Exchanges and Clearing on Tuesday morning.
CKI has agreed to contribute approximately C$288.46 million in cash to HMLP, in exchange for a 16.25 per cent stake in HMLP.
PAH has agreed to pay C$865.38 million in cash to HMLP, for 48.75 per cent stake in HMLP.