Li’s Hutchison, Cheung Kong holding structure revamped

13 Jan 2015

Li Ka-shing, Hong Kong’s richest man, has announced the restructuring of his two flagship companies, Cheung Kong and Hutchison Whampoa, creating a new conglomerate to hold all non-property businesses including telecoms, infrastructure, energy, retail, aircraft leasing and port-related services, namely Cayman Islands-incorporated CK Hutchison Holdings (CKH Holdings), registered and listed in Hong Kong. Another newly established Hong Kong-listed unit, Cheung Kong Property Holdings (CK Property), will combine the existing property businesses of Cheung Kong and Hutchison. Canning Fok Kin-ning, managing director of Hutchison Whampoa, will be co-MD at CKH Holdings with Victor Li Tzar-kuoi, MD of Cheung Kong (and Li’s oldest son). The restructuring is planned for completion near the end of June this year, pending regulatory and shareholder approval.

The restructuring – which involves a proposed share exchange merger and asset combination – will remove a layered holding structure between Cheung Kong and Hutchison, allowing public shareholders to directly invest in two separate listed vehicles alongside the Li family trusts, a Hutchison Whampoa press release states. At present, the Li family trusts are the controlling shareholder of Cheung Kong, which in turn owns 49.97% of Hutchison. After completion of all proposed transactions, the Li family trusts will be the controlling shareholder of each of CKH Holdings and CK Property (with a shareholding of 30.15% in each), and the Li family will continue to chair and lead the management of both companies. Former ‘other’ Hutchison shareholders will own 35.90% of both new holding companies, while former ‘other’ Cheung Kong shareholders will take a 33.95% share.

Hong Kong, CK Hutchison