Billionaire Li Ka-shing, chairman of CK Hutchison Holdings Ltd. and Cheung Kong Property Holdings Ltd., reacts during a news conference in Hong Kong, China, on Thursday, March 17, 2016. - Photographer: Billy H.C. Kwok/Bloomberg
HONG KONG: Li Ka-shing and his family have set in motion a series of deals this year that stand to completely transform his business empire.
The Hong Kong billionaire’s flagship conglomerate, CK Hutchison Holdings Ltd, is pursuing three major moves: an initial public offering of its retail arm to raise at least US$2bil for its largest revenue contributor, a potential listing or partial sale of its global telecom operations, and talks to sell 43 port assets, representing the bulk of its global portfolio for more than US$19bil in cash.
The Li family, which controls about 30% of CK Hutchison, believes selling and spinning off these businesses can unlock far greater value than the market currently assigns to them under the existing structure, a person familiar with the plans said, asking not to be identified because the matter is private.
By separating the assets, they hope to fetch higher prices and narrow the steep discount at which the company trades relative to its net asset value.
If CK Hutchison completes all these deals, it would have shed or spun off most of its core operating businesses, handing Li’s elder son Victor Li, who now chairs the group, a fresh war chest to reshape the company in an era defined by trade tensions and technological disruption, including the rise of artificial intelligence.
“The Li family has accumulated massive wealth over the past decades,” said Vincent Lam, chief investment officer at Hong Kong-based VL Asset Management.
“The most important thing for the family now is to make sure that the wealth is monetised and safeguarded.”
The moves mark a generational shift for one of Hong Kong’s most storied business empires.
Li Ka-shing built CK Hutchison into the world’s leading port operator and a major player in European telecommunications, leveraging political connections and riding on global expansion.
Victor, who took over in 2018, faces the challenge of steering the group through a far more volatile environment, where geopolitical sensitivities and regulatory hurdles loom large.
In his heyday, Li’s wealth ballooned as Hong Kong grew into an international financial hub, capitalising on China’s opening to a world that embraced collaboration and deepening trade ties.
His uncanny sense of timing earned him the nickname “Superman.” He expanded aggressively abroad, buying ports in Panama, building mobile networks in the United Kingdom and operating oil plants in Canada.
By the early 2000s, he had built his group into the world’s largest port operator and the biggest Asian investor in European telecommunications.
But the landscape has changed since Xi Jinping assumed power, tightening the state’s grip on the private sector and keeping once-powerful tycoons at arm’s length.
In Hong Kong, Li and his peers are viewed with growing scepticism by Beijing, while abroad, Li’s perceived ties with China have raised suspicions and created political hurdles for his operations, many of which sit in highly regulated industries.
The Li family has lately found itself on the wrong side of politics.
The 97-year-old billionaire, who once rubbed shoulders with China’s top leaders, has fallen out of favour with President Xi.
Over the past decade, state media have criticised him for selling assets in China and for remarks seen as sympathetic to Hong Kong’s pro-democracy youth.
Beijing’s anger over CK Hutchison’s planned ports sale was so intense that state-owned firms were instructed to pause dealings with the Lis.
“Li’s empire was built on intricate political connections he developed in the past,” said Lam. — Bloomberg
