The consortium led by CK Infrastructure (1038) on Thursday agreed to sell all its interest in UK Power Networks to French electric utility Engie in a deal of £10.5 billion (HK$110.8 billion).
This marked one of the biggest transactions in the global utilities sector in recent years.
The consortium included CK Infrastructure, Power Assets (0006), and CK Asset (1113), which hold 40 percent, 40 percent, and 20 percent of the UK electricity operator's shares, with basis consideration for the sale at £2.11 billion, £4.22 billion, and £4.22 billion.
CK Asset and Power Assets are estimated to record gains of approximately HK$8.4 billion and HK$10.7 billion from the transaction, while CK Infrastructure expected to earn about HK$14.5 billion including its nearly 36.01 percent stake in Power Assets.
People familiar with the matter said that UKPN's valuation is projected to reach £16.84 billion, nearly double the value at the time of acquisition in 2010. Its equity value also rose 3.34 times to nearly £11.1 billion during the period.
Besides, since acquiring UKPN in 2010, the CK Group has secured shareholder distributions of £4.4 billion, with a cash return exceeding six times.
Victor Li Tzar-kuoi, chairman of CK Asset and CK Hutchison (0001), said that CK Group will continue to seek investment and development opportunities and will look to existing and new markets to identify projects in regulated industries or those with long-term stable contracts.
The deal marks a significant milestone for both the company and the UK utilities sector, said Andrew John Hunter, co-managing director at CK Infrastructure, adding that in the early stages of the acquisition, UKPN’s performance was less than ideal, while its operation and financial condition have improved a lot after years of management.
CK Infrastructure noted in an exchange filing that the disposal will allow the company to monetise its investment at an attractive valuation with significant accounting gain and cash proceeds for future investments or acquisitions.
