12 December 2018
Derek Lai (right) listed five forms of mixed ownership SOEs can choose from. Photo: HKEJ
Derek Lai (right) listed five forms of mixed ownership SOEs can choose from. Photo: HKEJ

More SOEs may choose dual listing amid ownership reform

More state-owned enterprises (SOEs) are expected to float their shares in both Hong Kong and mainland China amid their transition to mixed ownership, Deloitte Touche Tohmatsu Ltd. said.

Five forms of hybrid ownership, including open restructuring of businesses, assets and liabilities, are likely to be used in the transformation, the Hong Kong Economic Journal reported Monday, citing Derek Lai Kar-yan, Deloitte China’s managing partner for the southern region.

Other forms are listing of core assets or the group as a whole, introduction of industry investment funds, establishment of employee stock ownership plans and the introduction of strategic investors.

One of the main goals in the mixed-ownership reform is to strengthen the competitiveness of the SOEs.

A certain degree of freedom for enterprises to decide on their own forms of reform will be given, Hong Yu, Deloitte China’s director of energy, resources and infrastructure consulting, said.

Hong cited the example of China Petroleum & Chemical Corp. (00386.HK), which has retained only four out of the 11 board seats for its retail business in the course of introducing private capital.

The consulting firm said in its latest white paper that regulatory hurdles among different sectors remain a key obstacle in the ownership transformation of the SOEs.

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Hong Kong Economic Journal

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