Monday 23 October 2017

Hong Kong firm eyes State's €3bn fire sale of utilities

VISIT: Chinese Vice President
Xi Jinping
VISIT: Chinese Vice President Xi Jinping
Jerome Reilly

Jerome Reilly

A major Hong Kong-based company with close links to the Chinese government is interested in acquiring Irish utilities included in the Government's €3bn fire sale of State assets, the Sunday Independent understands.

Cheung Kong Infrastructure (CKI), whose controlling shareholder is conglomerate Hutchison Whampoa, is interested in acquiring power generation and other utilities in English-speaking countries and has already made significant investments in the UK.

Minister for Public Expenditure and Reform Brendan Howlin announced that the Government would sell assets including Bord Gais Energy and the ESB's non-strategic power generation capacity on Wednesday, just 48 hours after the visit by Chinese Vice President Xi Jinping, which included trade talks with Taoiseach Enda Kenny.

The sale of the assets, which is part of the deal with the EU/ECB/IMF troika, also includes some of the forests of state company Coillte. Also included is the State's remaining 25pc stake in Aer Lingus.

The man behind both CKI and Hutchison Whampoa is Li Ka-shing, who holds an honorary degree from Trinity College. Forbes magazine estimated the Chinese tycoon's wealth to be more €12bn last year and Hutchison Whampoa is worth some €80bn.

The Sunday Independent has learned that the Chinese delegation which arrived last week were particularly interested in pressing for details of planned Government disposals during the talks.

Hong Kong-based Citi analyst Paul Lau said: "The company is actively looking at opportunities to buy regulated and operational utility assets for profit enhancement. We think the most likely candidates would be those in Europe, where many utility companies have difficulty in refinancing."

Asked by the Sunday Independent if the visit by the Chinese president-in-waiting was linked to the long-signalled sale of state assets, Mr Lau said: "(It's) possible, as Chinese utility companies are expanding overseas. For instance, the Chinese State Power Grid Company has bought 25pc stake of the power grid in Portugal recently. Irish utilities therefore fit in their acquisition criteria," he said.

Contacted by the Sunday Independent, Mr Ivan Chan, Chief Investment Officer of CKI, said they did not comment on market speculation.

Last year the Sunday Independent reported that a delegation from the conglomerate had met the National Pensions Reserve Fund, the NTMA and the then Taoiseach Brian Cowen and Finance Minister Brian Lenihan before Christmas 2010. The delegation, including Hutchison Whampoa European deputy chairman Christian Salbaing, indicated that Mr Li would be interested in investing in Irish infrastructure.

Sunday Independent

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