ParknShop solo sale scrapped
Li Ka-shing's Hutchison Whampoa says timing not right for deal, joins stablemate Cheung Kong in HK$9b property sale in Shanghai
Companies controlled by Asia's richest man, Hong Kong tycoon Li Ka-shing, said yesterday that they were selling a Shanghai property venture for HK$9 billion but that the ParknShop supermarket chain was no longer up for individual sale, prompting fresh speculation about investment flight from the Hong Kong and mainland markets.
Hutchison Whampoa and Cheung Kong would each sell a 50 per cent stake in Extreme Selection, the owner of the company developing the property project at Lujiazui Ring Road in Shanghai, Hutchison said in a statement to the Hong Kong stock exchange after the market closed yesterday.
HYZL Development and HYZL Investment would each buy 47 per cent, while Diamond Gate Group, a China Everbright subsidiary, would take the remaining 6 per cent, a China Everbright statement said yesterday.
"This may be part of his plan to raise capital to finance more projects in Europe," said a fund manager who declined to be named. "But you can always argue he may be sort of losing confidence in the business environment in Hong Kong and China amid so many social disputes and uncertainties."
Signs that Li is losing faith in the hometown that helped make him Asia's richest man have been coming thick and fast since July, when his conglomerate, Hutchison Whampoa, sought to offload one of its cash cows, the ParknShop supermarket chain.
ParknShop, which generated HK$21.7 billion in revenue last year, could fetch US$2 billion in fresh funds. But Hutchison said in a statement last night that it had scrapped a plan to sell ParknShop as the sale "at this time would not deliver maximum value" to shareholders.
Market watchers said the reason for the withdrawal of the sale was that Hutchison had been reluctant to cut the price.
