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2nd LD: Li Ka-shing's two major companies announce restructure plan

Xinhua, January 9, 2015 Adjust font size:

Hong Kong's leading multinational corporations Cheung Kong Holdings and Hutchison Whampoa on Friday announced a merge and reorganization plan to restructure their operations into two new companies respectively specializing in real estate business and all other non-real estate businesses.

The two super international conglomerates are the main pillars of the family businesses owned by Hong Kong's wealthiest man Li Ka- shing.

The two new companies, CK Hutchison Holdings Limited (CKH Holdings) and Cheung Kong Property Holdings Limited (CK Property), will be listed on the Hong Kong bourse.

CKH Holdings will hold all of the non-property businesses of Cheung Kong and Hutchison Whampoa, including ports and related services, telecommunications, retail, infrastructure, energy and movable assets leasing operations (aircraft leasing).

CK Property will combine the property businesses of Cheung Kong and Hutchison Whampoa in Hong Kong, the Chinese mainland and overseas.

Commenting on the transaction, Li said it is a watershed event in the Group's history. "It is transformational from the point of view of shareholder value. Cheung Kong and Hutchison have grown substantially in size and scale over the past decade."

Li said the reorganization proposed on Friday will place the companies in an even stronger position for future growth and development.

"This transaction is expected to create significant value for shareholders through the elimination of the holding company discount, which will be shared by Cheung Kong and Hutchison shareholders," Li said.

"The distinct business profiles of CKH Holdings and CK Property will enable investors to better value the underlying businesses of the Groups and may lead to further value enhancement in the future, " Li added.

According to Li, subject to all required approvals being obtained and the fulfillment of all conditions precedent, it is expected that all the proposals will be completed around the end of the first half of 2015.

After completion of the proposals, CKH Holdings will be a multinational conglomerate of significant size and scale, operating in over 50 countries, according to the announcement.

Meanwhile, CK Property will be one of the largest property companies listed in Hong Kong with a leading market share in Hong Kong, strong penetration in the mainland as well as an international presence.

According to the announcement, Cheung Kong and Hutchison Whampoa will be merged into a new holding company, which will be incorporated in Cayman Island.

"About 75 percent of listed companies in Hong Kong are incorporated in Cayman Island, including state-owned enterprises. We just follow the trend," Li said. Endi