|Hong Kong Billionaire Relocating Firms to Cayman|
One of the world’s richest men and most generous philanthropists, Li Ka-shing, regularly part of the Fortune 500 list of billionaires and Hong Kong’s wealthiest businessman, is shifting his business empire to the Cayman Islands.
Longtime owner of multinational conglomerates Cheung Kong Group and Hutchison Whampoa, Mr. Li, 86, holds vast local and overseas operations involving telecommunications, ports, Canadian oil and gas giant Husky Energy, retail outlets, infrastructure and a far-reaching international property portfolio.
Forbes magazine has pegged Mr. Li’s wealth at US$33.5 billion.
The complex restructuring of the empire, announced in a 70-page filing to the Hong Kong Stock Exchange, will consolidate Mr. Li’s holdings into two groups: non-property assets, which will be held by Cayman CKH Holding, and property assets, held by CK Property.
Advantages in Cayman
In the Cayman Islands, dividend payments to CKH Holdings shareholders are not subject to taxation. Mr. Li’s stock-exchange document said reorganization would provide greater flexibility for making distributions to CKH Holding shareholders from the company’s reserves.
The document added that Cayman is one of the jurisdictions accepted by the Hong Kong stock exchange for issuers seeking a listing and both Cayman entities would be listed there.
In addition to making distributions to shareholders out of profits, Cayman law permits a Cayman Islands company, subject to a solvency test, to make distributions out of the share premium account.
The proposed transaction, which offers Cheung Kong shareholders one CKH Holdings share for every Cheung Kong share, and Hutchison shareholders 0.684 CKH shares for every Hutchison share, is expected to create a substantial share premium in CKH Holdings, the reorganization proposal stated.
Cheung Kong’s shares in Hong Kong traded up as much as 14 percent, while Hutchison shares jumped 12 percent.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Jan.14, 2015