Power Assets Holdings Ltd., controlled by Asia’s richest man, Li Ka-shing, said its Hong Kong electricity arm will have a market value of at least HK$48 billion ($6.2 billion) should a spinoff of the unit proceed.
Power Assets plans to spinoff Hongkong Electric Co. and sell as much as a 70 percent stake in the unit, with the stock expected to begin trading in Hong Kong on Jan. 29, it said in a statement yesterday. The unit will have a market value of HK$48 billion to HK$63.4 billion and the spinoff won’t go ahead if the minimum market value of HK$48 billion isn’t achieved, it said.
The proposed spinoff comes as Li sells assets in the former British colony, where growth is slowing. Power Assets will use proceeds from the spinoff of the unit to help fund acquisitions in the global power sector, it said.
Power Assets expects an estimated gain of HK$53 billion from the spinoff, the company said in the statement, without giving a price the shares will be sold at.
Shares of Power Assets gained 2 percent to HK$60.15 in Hong Kong as at 10:46 a.m. local time, the biggest gain since Sept. 30. The benchmark Hang Seng index declined 0.6 percent.
Goldman Sachs Group Inc. and HSBC Holdings Plc are joint sponsors for the listing, Power Assets said in the statement. The Hong Kong stock exchange has approved the spinoff, which is conditional on approvals from shareholders and the listing committee.
Hongkong Electric started operations in 1890 and provides power to about 568,000 customers. Power Assets announced the proposed spinoff of the unit in September.