Date
23 September 2017
Wheelock & Co., chaired by Peter Woo (left), may follow in the footsteps of Cheung Kong's restructuring. Meanwhile, Adam Kwok (right) is watching the deal closely. Photos: HKEJ
Wheelock & Co., chaired by Peter Woo (left), may follow in the footsteps of Cheung Kong's restructuring. Meanwhile, Adam Kwok (right) is watching the deal closely. Photos: HKEJ

Property conglomerates seen emulating Cheung Kong restructuring

Cheung Kong (Holdings) Ltd. (00001.HK) has unveiled the listing documents for CK Hutchison Holdings Ltd. (CKH Holdings), the new holding company in a major restructuring involving the privatization of the developer’s Hutchison Whampoa unit.

Some of the property-based conglomerate’s peers are expected to be watching its moves closely with a view to taking a leaf out of Li Ka-shing’s book.

Wheelock & Co. Ltd. (00020.HK) and its subsidiary The Wharf (Holdings) Ltd. (00004.HK) are the most likely to consider a similar reorganisation, the Hong Kong Economic Journal reported Wednesday, citing JPMorgan Chase & Co.

Cheung Kong’s restructuring is expected to be completed by June if all necessary resolutions are approved by shareholders and the authorities, including the High Court and the listing committee of the Hong Kong stock exchange.

CKH Holdings had HK$38.1 billion in debt at the end of November, the listing documents show.

Hong Kong-registered Cheung Kong will exchange each of its shares for one share of Cayman Islands-registered CKH Holdings.

The new holding company will then buy out the other shareholders of Hutchison Whampoa Ltd. (00013.HK) before injecting privately owned shares of Husky Energy Inc.

The combined property businesses will then be spun off and floated on the Hong Kong stock exchange as Cheung Kong Property Holdings Ltd., also registered in the Cayman Islands.

The proposal requires a super-majority of 75 percent of the votes at a Cheung Kong shareholder meeting.

JPMorgan said Wheelock & Co. and Wharf, another Hong Kong group comprising a major property developer and conglomerate, may unlock HK$30 billion worth of additional value, or HK$14.60 per share, if it undergoes a restructuring modeled on Cheung Kong’s.

Sun Hung Kai Properties Ltd. (00016.HK) executive director Adam Kwok Kai-fai — the eldest son of former co-chairman Thomas Kwok Ping-kwong, who is in prison after being convicted of bribery — said the company is taking a close look at Cheung Kong’s restructuring deal.

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