CK Infra considers listing European assets

The proposed move comes two weeks after the Hong Kong-listed group’s $9.5bn takeover offer for APA Group in Australia was blocked on ‘national interest’ grounds.

Hong Kong-listed CK Infrastructure has revealed it is considering selling parts of its European infrastructure portfolio to a newly created company to be listed in London.

The move would spin off minority interests of certain parts of its portfolio, although it remains unclear at this stage which assets could be included. CK Infrastructure’s European portfolio is dominated by UK regulated assets, although it also includes energy-related companies in Continental Europe.

“The new investment company is intended to provide investors in the London market with the opportunity to invest in such infrastructure assets and, going forward, other third-party infrastructure assets,” CK Infrastructure said in a statement to the Hong Kong exchange. CKI had not responded to requests for further comment at the time of publication.

“The company may hold a minority shareholding interest in the new investment company following completion of the listing,” it added.

CK Infrastructure’s announcement comes two weeks after the company was blocked from acquiring gas pipeline giant APA Group, despite agreeing a deal worth A$13 billion ($9.5 billion; €8.3 billion), after the Australian government deemed it “contrary to the national interest”. The government believed it would “result in an undue concentration of foreign ownership by a single company group in our most significant gas transmission business”.

It was also blocked in 2016 from buying Ausgrid on national security concerns, when both CK Infrastructure and China State Grid were the only two bidders for the asset.

Many of CK Infrastructure’s European assets are held with a 50 percent stake or below, although several of the assets are also partially owned by Power Assets, a Hong Kong-listed utility owned 38 percent by CK Infrastructure.

The company was singled out for criticism by UK energy regulator Ofgem for failing to pass on higher returns generated under the regulatory framework to consumers through its ownership of Northern Gas Networks and Wales and West Utilities.

CKI posted in July a 0.3 percent interim profit increase from its UK-based assets to HK$2.9 billion ($374.4 million; €329.8 million). Its Continental Europe portfolio generated a 220 percent increase to HK$588 million, largely driven by the first contribution to the accounts by ista, the German energy management services company CKI and CK Property Holdings acquired last July in a deal valued at up to €4.5 billion.