Cheung Kong Infrastructure Holdings proposes merger with Power Assets Holdings

The boards of directors of Cheung Kong Infrastructure Holdings (CKI), Assets Global International, Power Assets Holdings (PAH) and CK Hutchison Holdings have jointly announce a proposal for a stock-for-stock merger between CKI and PAH.

The proposed merger is intended to deliver value to both CKI’s and PAH’s shareholders:

• For CKI, as the listed company holding the merged businesses, the deal would equip it with a stronger balance sheet and significant cash balance to capture global opportunities for the enlarged CKI Group in the broader infrastructure sectors.

• For PAH, the deal would enable the other than CKI’s subsidiaries to exchange their shares in PAH for new shares in CKI, which has a proven track record of earnings and dividend growth, and allow them to invest in the enhanced infrastructure platform that will be created.

If the deal is closed, PAH will become a wholly-owned subsidiary of CKI. CKH Holdings will remain as the controlling shareholder of CKI with approximately 49.19% shareholding but it is expected that CKH Holdings will no longer consolidate CKI as a subsidiary.

Approximately 38.87% of PAH’s issued shares are held by wholly-owned subsidiaries of CKI. Under the proposal, a scheme of arrangement will be put forward by PAH to the other than CKI’s subsidiaries pursuant to which all PAH shares not held by CKI’s subsidiaries will be cancelled, in exchange for newly issued CKI shares in the ratio of 1.04 CKI shares for every one PAH share.

PAH’s business consists solely of investments in the power infrastructure sector. CKI focuses its business on the non-power infrastructure sector, while also having a number of co-investments with PAH on power projects.

As at 30 June 2015, there were 11 projects in which both CKI and PAH had ownership interests. The total net assets of those projects attributable to each of CKI and PAH represented around 62.6% of the adjusted total assets of CKI and 66.9% of the adjusted total assets of PAH .