Collective surge during trading! Li Ka-shing suddenly announces big news!

CK Hutchison Holdings Limited, a major conglomerate under Li Ka-shing, is selling a large amount of UK assets!

This morning, three companies under CK Hutchison announced collectively that they will sell their interests in the UK electricity grid business to French utility company Engie, totaling over HKD 110 billion (approximately RMB 96.66 billion).

CK Infrastructure Group, Power Assets Holdings, and Cheung Kong Property Holdings all stated that selling their stakes in UK Power Networks can generate significant accounting gains and cash proceeds for future investments and acquisitions.

During the trading session, stocks under CK Hutchison rose collectively. As of the time of this report, CK Property Holdings and CK Hutchison increased by nearly 3%, while CK Infrastructure and Power Assets gained over 2%.

Li Ka-shing Sells UK Power Grid Company

On the morning of February 26, Li Ka-shing’s CK Infrastructure, Power Assets, and CK Property announced on the Hong Kong Stock Exchange that they plan to sell 100% of their shares in UK Power Networks to French utility company Engie.

According to the announcement, CK Infrastructure, Power Assets, and CK Property hold 40%, 40%, and 20% stakes in UK Power Networks, respectively. The sale prices are HKD 44.3 billion, HKD 44.3 billion, and HKD 22.15 billion.

The companies stated that since acquiring their interests in the target group (UK Power Networks) in 2010, the group has steadily transformed and is now a leading distribution network operator in the UK, continuously providing stable financial contributions to CK Infrastructure and CK Hutchison. During the investment period, the target group experienced significant growth. This sale will allow the group to realize its investment at an attractive valuation, generating substantial accounting gains and cash proceeds for future investments or acquisitions.

CK Infrastructure noted that, subject to the completion of the transaction and based on current information, after including its approximately 36.01% stake in Power Assets, it expects to record an actual gain of about HKD 14.5 billion from this transaction. The actual amount realized will need to be verified by auditors and will depend on the final price, book costs, other related expenses (including transaction costs), and the actual exchange rate, so it may differ from the above figure.

Additionally, Power Assets expects to record a gain of about HKD 10.7 billion from the sale of its subsidiaries, while CK Property expects a gain of about HKD 8.4 billion from its sale.

What is the UK Power Grid Company?

UK Power Networks primarily distributes electricity in London, Southeast England, and Eastern England. The company owns and operates power grids in these regions.

Data shows that UK Power Networks’ total grid length is approximately 192,000 kilometers, covering over 29,000 square kilometers, serving 8.5 million households and businesses. The company also operates non-regulated businesses through UK Power Networks Services, including designing, constructing, owning, and operating private power grids, with clients including public and private organizations.

According to audited consolidated financial statements prepared in accordance with UK GAAP, for the fiscal year ending March 31, 2024, the group’s audited pre-tax profit was approximately GBP 466.9 million (about RMB 4.35 billion), and net profit was about GBP 312.4 million (about RMB 2.9 billion).

In the following fiscal year ending March 31, 2025, UK Power Networks’ performance showed significant growth, with pre-tax profit soaring to about GBP 1.1493 billion (about RMB 10.7 billion), and net profit increasing to approximately GBP 852.9 million (about HKD 8.956 billion). The substantial growth was mainly due to two factors: first, the group recovered additional amounts from previous years when actual inflation rates exceeded the forecasted rate used for setting charges; second, the revenue for the fiscal year ending March 31, 2025, also included higher incentive payments related to the RIIO-ED1 price control, which are collected with a two-year delay.

As of March 31, 2025, UK Power Networks’ audited total assets net value was approximately GBP 5.5835 billion (about RMB 52 billion).

(Source: Securities Journal)