Mike Grinter | Jan 18, 2011 9:00AM EST
Hutchison Port Holdings, the world’s largest port operator, plans to spin off the majority of its port operation business and list it on the Singapore stock exchange.
The newly established business unit, Hutchison Port Holdings Trust, is expected to be listed in February or early March and is valued at $6 billion, parent company Hutchison Whampoa said. The IPO is subject to approval of the Hutchison Whampoa board and the stock exchanges of Hong Kong and Singapore.
As a new publicly traded entity, HPH Trust will hold, operate and develop all of Hutchison Group’s existing and future deep-water container businesses in Guangdong province in mainland China, Hong Kong and Macau. The initial principal assets of HPH Trust include the group’s interests in the operators and owners of deep-water container ports in Hong Kong and Yantian.
These include: Hutchison International Terminals, the owner and operator of terminals 4, 6, and 7 and two berths in terminal 9 at Kwai Tsing, Hong Kong; COSCO-HIT, the owner and operator of Terminal 8 at Kwai Tsing; YICT, the operator of Yantian International Container Terminals Phases I and II in Shenzhen; YICTP3, the operator of Yantian International Container Terminals Phase III and its expansion project that is being developed.
Also included is SYWPT, the operator of Shenzhen Yantai West Port Terminals Phase I and Shenzhen Yantian West Port Terminals Phase II which is being developed.
Measured by throughput, and considering Hong Kong and Shenzhen as one market by virtue of their geographical proximity, in 2009, Hong Kong and Shenzhen were the world’s busiest container port market and trading hub with a total throughput of approximately 39.2 million 20-foot equivalent units.
The Hong Kong-listed conglomerate, which is controlled by billionaire Li Ka-shing, will retain a stake of around 25 percent in the Singapore trust.
“There is significant potential for economic and trade growth in the Pearl River Delta generally and the port industry is well-positioned to capitalize on such opportunities,” Hong Kong-listed Hutchison said. The Singapore listing “will enable the group to take full advantage of such opportunities by creating a new funding platform to attract new investors.”
“This new public vehicle will be an integral part of the group’s global ports operations,” Hutchison Managing Director Canning Fok said in a statement. The trust “will provide the best ongoing structure for operation, development and financing of future growth of its port operations in the Pearl River Delta.”
— Bruce Barnard in London contributed to this report.