Hong Kong construction firms join forces to invest US$100 million to acquire builders
The consortium of construction firms target opportunities in countries covered by economies along the old Silk Road.
A consortium of Hong Kong construction-related firms will be formed to look for acquisition opportunities in countries covered by Beijing’s “Belt and Road Initiative” to offset shrinking profit margins from fierce competition at home.
Led by Hong Kong-listed Asia Allied Infrastructure Holdings (AAIH), the consortium plans to pull in about US$100 million to invest in firms in countries along the land and marine routes of the old Silk Road.
Dominic Pang Yat-ting, chairman of AAIH, said the initial target was to acquire minority stakes of about 20 to 30 per cent in construction firms in the Philippines, one of the more than 60 nations that China wants to develop closer ties with through the trade plan.
“Our business model is to nurture these construction firms into a market leader through participation in the infrastructural boom spurred by the Belt and Road Initiative and Greater Bay Area development plan,” Pang told the South China Morning Post.
AAIH chief executive officer Derrick Pang Yat-bond said instead of being a competitor, the soon-to-be formed consortium would help these firms in the emerging markets bid for upcoming major projects.