Workers load a container ship at a port in the city. Hutchison Whampoa Ltd said Monday it has raised its stakes in Hongkong International Terminals Ltd and acquired interests in some properties located in Kwun Tong. Thomas Lee / Bloomberg

Conglomerate buys interests from China Resources Hldgs for HK$5.7b

Hutchison Whampoa Ltd, the conglomerate controlled by billionaire Li Ka-shing, said Monday it has raised its stakes in some container terminals by acquiring additional interests from partner China Resources (Holdings) Co Ltd for HK$5.7 billion.

The deal includes acquisition of shares in Hongkong International Terminals Ltd (HIT) and interests in properties located in Kwun Tong in east Kowloon, Hutchison said in a statement filed to the stock exchange Monday.

HIT is the flagship operation of Hutchison Port Holdings (HPH) Group, the conglomerate's port operation unit.

HIT operates 12 berths on its own and another two through its joint venture with COSCO Pacific Limited in the Kwai Chung container port area of Hong Kong, one of the busiest container ports in the world.

Before the deal, Hutchison held about 53 percent of HIT. It did not provide further details on the company's holdings in the acquired assets after the deal.

The purchase will be settled in cash and is expected to be completed before January 7, according to the company.

In 2005, Hutchison sold a 20 percent stake in HIT to Singaporean investment holding company PortCapital Ltd, booking a gain of HK$5.5 billion from the sale.

"Since the market is bullish on shipping business in 2011 counting on the US economic rebound, Hutchison has accelerated the pace in the acquisition of port assets," said Alvin Chung, associate director with Prudential Brokerage.

The rebound in global trade has boosted the container-freight fees which helped most shipping companies return to the black in 2010.

Hutchison Port Holdings, the conglomerate's port division, in August said its earnings before interest and taxes (EBIT) rose 35 percent in the first half of 2010 from a year ago as its container throughput increased 17 percent to 35.3 million twenty-foot equivalent units (TEUs).

Hong Kong's total exports rose by 23.8 percent for the first 11 months of 2010 compared with the same period a year earlier while total imports increased by 26.1 percent, according to data provided by the Census and Statistics Department.

According to a report prepared by IHS Global Insight, trade will continue to grow in 2011 albeit at a slower pace compared with 2010. It projected that global containerized trade measured in TEUs will grow at 6.8 percent this year from 9.2 percent growth in 2010.

"Hutchison has been very active in seeking investment opportunities," said Chung. "Particularly at a time when Asian markets expect strong export growth in 2011 as demand from the US is likely to be further driven by US government measures in stimulating the economy, Hutchison will not let this opportunity slip away."

Shares of Hutchison climbed 5.3 percent to close at HK$84.20 in Hong Kong trading Monday, compared with a 1.74 percent gain in the city's benchmark Hang Seng Index. The stock surged almost 50 percent last year.

China Daily

(HK Edition 01/04/2011 page2)