Power Assets Holdings Raises $3.1 Billion in Hong Kong Electric IPO

Power Assets Holdings Ltd., an electric utility company controlled by the world’s eighth-richest man Li Ka-shing, raised $3.1 billion for its HK Electric Investments single-investment trust during the unit’s initial public offering (IPO) on Tuesday. Power Assets said in a statement that the final offer price for its 4.43 billion units was $0.70 each.

China’s biggest power distributor, State Grid Corporation, has agreed to pay as much as $1.28 billion for an 18 percent share in HK Electric, according to Bloomberg. Meanwhile, Power Assets will maintain 49.9 percent control of the trust after the offering.

The $3.1 billion IPO is the third-largest for a Hong Kong company on record. However, Power Assets had initially hoped to raise $5.7 billion when it first announced the spinoff of HK Electric in mid-December. According to the New York Times, the deal was downsized due to a lackluster reception from investors during the preliminary marketing phase.

Power Assets plans to use money raised from the IPO to acquire companies abroad. Power Assets has already acquired energy-related assets from the United Kingdom, Australia, China, New Zealand, Thailand, Canada, and the Netherlands. Power Assets’ total earnings from outside Hong Kong totaled $657 million in 2012.