Hong Kong-listed Cheung Kong Property Holdings, controlled by tycoon Li Ka-shing, has proposed to change its company to “CK Asset Holdings” to better reflect its strategy to achieve “long-term sustainable business growth and value creation”.
The property developer has recently been pursuing global investment opportunities with stable recurring revenue from infrastructure, property and aircraft leasing, in a bid to diversify its activity, which has previously focused on building flats in Hong Kong. The company explained that the shift in strategy is meant to mitigate the cyclical nature of cash flows associated with property development.
Last year, the company acquired an aircraft leasing business from CK Hutchison, another investment company controlled by Li, for $988 million. It then teamed up with Cheung Kong Infrastructure and Power Assets, both of which are also Li’s businesses, to jointly acquire Australian energy asset manager Duet Group for $5.6 billion.
In addition to the name change, CKP is looking to sell a 25 percent stake in a wholly owned subsidiary, Ontario-based Reliance, to CKI for C$714.92 million ($564 million; €493 million). Upon closing, CKI will be appointed as the manager for the Canadian household equipment service business, which operates under the brand Reliance Home Comfort to provide water heaters, air conditioning and other household appliances.
“The transaction would provide synergy effects to both CKP and CKI and allow them to share their management and strategic expertise in the management and operation of the business,” stated a filing by CKP.
With operations in Manitoba, Saskatchewan and Alberta in Canada and Georgia in the US, Reliance has an unaudited net asset value of about C$1.144 billion.
Both the name change proposal and the proposed transaction are subject to shareholder approval.