The political turmoil surrounding Hong Kong's richest man, Li Ka-shing, over the Panama Canal is intensifying. Recent news indicates that under pressure from Beijing, Li's CK Hutchison Holdings will temporarily suspend the sale of the Panama port. Meanwhile, the group is planning to spin off its global telecommunications business and list it on the London Stock Exchange.
If successfully completed, this will mark a major asset redeployment following the secondary listing of Cheung Kong Holdings in the UK last year. Furthermore, Li Ka-shing's recent significant divestment from China and shift to the UK, where he has been described as having "bought half of Britain," has sparked speculation about whether he is attempting to break free from Beijing's control and cast another vote of no confidence in China.
Our station checked the data and found that the telecommunications business contributed a quarter of the group's profits, with revenue reaching approximately HK$88.37 billion last year.
According to Reuters, citing sources familiar with the matter, Cheung Kong Holdings has begun preparations to spin off its global telecommunications business, encompassing operations in Hong Kong, Europe, and Southeast Asia. The spin-off could be valued at between £10 billion and £15 billion (approximately $13 billion to $19 billion), with plans for a London listing, with completion expected as early as this year. However, complex challenges such as political influence, internal restructuring, and shareholder approval remain uncertain. Cheung Kong Holdings declined to comment on the report.
Telecommunications business revenue reached approximately HK$88.37 billion last year
If successful, this would be one of the largest IPOs on the London Stock Exchange in recent years, following the announcement last August by CK Infrastructure Holdings Limited, a subsidiary of Cheung Kong Holdings, of a secondary listing in London. At the time, Cheung Kong Holdings Chairman Li Ka-shing stated that he was "not currently considering overseas listings for other companies in the same group" and that he "couldn't see the Hong Kong market performing well in the long term."
According to CK Hutchison Holdings' annual report released on the 20th of this month, its telecommunications business, led by its subsidiary CK Hutchison Group Telecom ("CKHGT"), is one of the group's most profitable divisions, contributing a quarter of the group's profits. Last year, revenue reached approximately HK$88.37 billion, a 2% year-on-year increase, primarily driven by strong performance within the European Three Group. The company's subsidiary, Three UK, is currently in the process of completing a $19 billion merger with Vodafone, a prominent British telecommunications company. This merger is expected to be completed within the first half of this year and is expected to be a major step towards the group's plans for a secondary listing in the UK.
At that time, CK Hutchison said that its telecommunications business would conduct a comprehensive review and improve productivity this year, focusing on reducing operating and capital costs, and "will complete this in-depth assessment and announce new targets within the year."
Of note, the Group is concerned that "there can be no assurance that future decisions, or the interpretation and implementation of regulations, by European public authorities and/or regulatory bodies in the countries where the Group operates will not materially adversely affect the Group's financial condition and operating results." In particular, "ports are often considered critical national assets by governments," and political instability could affect overseas port concessions. Furthermore, national policies could hinder the enforcement of overseas infrastructure and telecommunications licenses and regulations. Currently, the Group has only confirmed that its mobile telecommunications licenses in the UK and Italy have been "substantially renewed in perpetuity."
"Suspension" does not mean cancellation of the port sale transaction
In addition, on the same day as this exclusive Reuters report, several Hong Kong media outlets quoted sources on Friday (28th) as saying that under repeated pressure from Beijing, Cheung Kong Holdings will "temporarily postpone" the signing of an agreement with BlackRock to sell overseas port assets such as Panama Ports next Wednesday (2nd). However, they pointed out that the day was not the "real deadline", but only the earliest date for signing the agreement. It did not mean that the transaction was canceled, but because of the complexity of the transaction, important details were still to be decided.
This station recently conducted an in-depth analysis of Li Ka-shing's strategic maneuvers at various critical moments to protect his empire and diversify his assets and business risks. Especially since Xi Jinping's rise to power in 2012, and amidst the political unrest in Hong Kong and between the US and China, Li has opted for a major exit from China and Hong Kong, expanding into Europe, Australia, North America, and Southeast Asia, with the UK being a key focus.
Currently, the largest portion of Li Ka-shing's group assets comes from Europe, accounting for over 53%, with 23% coming from the UK. Since the 1990s, Li Ka-shing has been building his investment empire in the UK, investing hundreds of billions of Hong Kong dollars in mergers, acquisitions, and investments in key British businesses such as ports, natural gas, telecommunications, railways, airports, real estate, and retail. The Financial Times reported that the Li Ka-shing family controls nearly 40% of the UK's telecommunications market, approximately 25% of the electricity market, nearly 30% of the natural gas supply market, nearly 7% of the water supply market, nearly one-third of the UK's docks, and over 500,000 square meters of land. Given that several of the group's companies have previously raised capital through UK IPOs, these moves have been described as "buying half of Britain" and a "vote of no confidence in Beijing."
