HK's Hutchison to spin off ports unit in Singapore

[January 18, 2011]  HONG KONG (AP) -- Billionaire Li Ka-Shing's Hong Kong conglomerate said Tuesday it is planning to spin off its ports in Hong Kong and southern China and sell shares in the new, separate unit on the Singapore stock exchange.

Hutchison Whampoa Ltd. said it has applied to hold an initial public offering for shares in Hutchison Port Holdings Trust, which will operate and develop container port businesses in southern China's Guangdong province, Hong Kong and Macau.

The unit's main assets will be deep-water ports in Hong Kong and nearby Yantian, Guangdong. It did not say how much it would raise from the share sale, except that it would be "significant."

The new share listing will allow investors to take advantage of economic and trade growth in the region, where seaborne cargo is booming thanks to demand for exports of the electronics, toys, clothing and other goods churned out by China's factories.

"There is significant potential for economic and trade growth in the Southern China region, which is already the largest trading hub in the world, and the creation of this new public vehicle will enable the group to take full advantage of such opportunities," Managing Director Canning Fok said in a statement.

Li Ka-Shing's Hutchison is one of the world's biggest port operators, with stakes in 51 ports in 25 countries. It will keep its ports in other countries and proposes a non-competition agreement for the two businesses.

The company also has businesses in property, energy and infrastructure, finance and telecommunications.

Shares in the new listing will be in the form of a business trust. The shares will be listed in Singapore because there are no regulations governing such trusts in Hong Kong yet. Hutchison Whampoa will keep a 25 percent stake in the business.

Credit ratings agency Fitch said the sale will generate a significant cash windfall for Hutchison, allowing the conglomerate to reduce debt.

Hutchison shares were down 1.4 percent to $94.40 Hong Kong dollars by late afternoon.

[Associated Press; By KELVIN CHAN]

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