Li's Power Assets readies sales pitch for spin-off

Power Assets, an international utilities firm controlled by Li Ka-shing, is expected to start marketing next week for the separate listing of its Hong Kong unit - worth up to HK$44.4 billion - through the sale of units in a newly set-up trust firm.

"Pre-marketing" presentations would be held next week to introduce the trust firm to selected fund managers and gauge their interest, followed by a formal roadshow the following week, a person close to the deal said.

Power Assets said in a circular to shareholders last month that potential investors in the trust, HK Electric Investments, could expect an annualised return of 5.5 to 7.3 per cent. It did not specify for how many years the indicative return was valid.

Standard Chartered Bank's head of renewables and utilities equity research, Evan Li, said the indicative yield was not particularly attractive compared with the close to 7 per cent of some business trusts backed by property and telecommunications assets. But highly regulated power generation and supply provided more stable returns than the more competitive property and telecommunications businesses, he said.

"In Hong Kong, there will be a group of investors interested in this offer," he said. "They may not be investment funds, but there are plenty of high-net-worth investors who would be interested."

Goldman Sachs (Asia) and HSBC are the global co-ordinators for the trust's listing and sale of units.