Tuesday, May 7, 2013

Li Ka-Shing - Old Deals

Please note that several of the links are 'dead' as this is content from a different era on Asia's Richest Billionaire, Li Ka-Shing.   We are not concerned as this is a historical archive of the most important deal of the time.  

 Asia's richest billionaire 1
Its a well known rags-to-riches story about Asia's richest billionaire but one should note especially the reach of  his team of global professionals, their skill at deal-making and the quality of their business partners.  Not to mention their speed at effecting transactions, start-ups, or bond offerings.    We note with some experience having operated seamlessly globally for over 20 years with this unique global team spanning 52 countries with over 250,000 employees.  Mr. Li, the richest man living in Asia is ahead by $5 billion USD despite the Subprime global financial crisis according to Forbes magazine.    
The 80 year-old has a history of overcoming adversity to succeed.   Mr. Li closed an unprofitable U.K. mobile phone operator called Rabbit in 1993. He returned a year later to start Orange Plc, which he sold in 1999  to Mannesman at a $15 billion profit.  Few investors think so strategically, or operate at such lightning speed,  in our humble opinion. Some of their professionals are so talented at making money.    He has one of the smartest deal making teams in the world - they play global monopoly!  I am proud to have worked under both Victor Li and Richard Li.  There are less than a handful in the world who have, and I have done it for more than two decades now.

Li Ka-Shing is always fore fronting
Why Shareholders and analyst alike prefer his far-sighted global management team
Billionaire Li Ka-shing's real estate investment trust was scheduled to begin gauging investors' interest for Hong Kong's first yuan-denominated initial public offering yesterday, according to terms for the sale
Hui Xian, as the Reit is called, will sell about 2.7 billion existing shares, or 40 per cent of the company in the IPO, giving the stock a market capitalisation of about 28 billion yuan (S$5.4 billion), according to a sales document obtained by Bloomberg News. About 80 per cent of the shares will be offered to institutional investors and the rest to Hong Kong retail investors, the terms show.
The sale may pave the way for other Hong Kong developers to follow with similar offerings as Hong Kong Exchanges & Clearing Ltd seeks to widen its product offerings to compete in the region.
HKEx chief executive officer Charles Li has proposed allowing yuan-denominated share sales in the city. Chinese-currency deposits at Hong Kong banks reached a record 370.6 billion yuan in January, according to Hong Kong Monetary Authority data.

The IPO is backed by the Oriental Plaza property in central Beijing, the terms show. Oriental Plaza, covering 100,000 square metres, is situated along Beijing's Changan Avenue. It consists of eight premium office towers, a shopping mall, a Grand Hyatt Hoteland serviced apartments, according to its website.
Oriental Plaza Cheung Kong Holdings Ltd, the Hong Kong developer controlled by Mr Li, owns 33.4 per cent of Oriental Plaza, while affiliate Hutchison Whampoa Ltd holds 18 per cent, according to the companies' 2009 annual report.
BOC International Holdings Ltd, Citic Securities International Co and HSBC Holdings plc are managing the initial offering, the terms show.
Managers for the IPO are scheduled to take share orders from March 30 through April 11, according to the terms. A listing is expected to be on April 19, the terms show. --   2011  March 24   BLOOMBERG
CKPays record $9.1 billion for EDF's electricity distribution in UK
Li Ka-Shing's CKI agrees to buy the debt-ridden UK electricity distribution business of France's EDF, which is the biggest ever Hong Kong deal in Europe

Li Ka-Shing continues to grow his UK infrastructure and utility portfolio, as well as break new records. A group led by his Cheung Kong Infrastructure (CKI) has agreed to pay £5.8 billion ($9.1 billion) for the UK power distribution business of France's EDF. 


The deal, which was announced on Friday, will be the biggest ever Hong Kong investment into Europe, exceeding Hutchison Whampoa's $7.6 billion purchase of a UK 3G licence in 2000.

CKI, controlled by Li Ka-Shing, Asia's richest man, linked up with Hong Kong Electric (39%-owned by CKI) to buy EDF Energy Networks. According to bankers o the deal, the price is a 22% premium to regulated asset value, and is in line with the 25% premium that the Electricity Supply Board of Ireland is paying for the Northern Ireland assets of Viridian and less than the multiples paid before the credit crisis for North West Electricity and UK water companies.   

Li Ka-Shing's strategy is to buy high quality, low risk , regulated assets in stable markets that are familiar to CKI, said bankers. The purchase would add to previous long-term investments in the UK, such as Northern Gas Networks, Cambridge Water and Southern Water. CKI is also apparently examining further opportunities in the UK. Li also owns regulated businesses in Asia, Australia and Europe through CKI.

EDF's electricity distribution network is Britain's biggest, supplying power to 20 million people in London, the east and southeast of England. Arrangements for the deal took about 10 months. The process was drawn out partly due to negotiations over an injection into the UK pension fund. The transaction is expected to be completed in the fourth quarter of this year after EDF has gained European works council, regulatory and shareholder approvals.  - 2010 August 2   FINANCE ASIA





Hutchison stands apart from any other company
GLOBAL DEALS



>“We are approaching a new age of synthesis. Knowledge cannot be merely a degree or a skill … it demands a broader vision, capabilities in critical thinking and logical deduction without which we cannot have constructive progress”
“Information and communications technology unlocks the value of time, allowing and enabling multi-tasking, multi-channels, multi-this and multi-that”– Li Ka-shing, chairman, Hutchison Whampoa Ltd. and Cheung Kong Holdings and widely consider to be the richest person of East Asian descent in the world   - BUSINESS IN VANCOUVER-
Li Ka--shing tops new HK rich list 
Forbes ranks the 79-year-old No. 1 with his US$32b fortune


Li Ka-shing rang up 42 per cent more riches last year, making him worth US$32 billion and crowning him king among tycoons in Hong Kong, which boasts more than 40 billionaires, said Forbes magazine yesterday.
Soaring property prices and unparalleled ties to China's white-hot economy boosted the wealth of many of the city's richest residents, according to Forbes' inaugural rich list for the Asian financial centre.
The city boasts one of the world's highest concentrations of luxury cars from Rolls-Royces to Porsches.
Last year was a stellar one for Mr Li, 79, who heads conglomerates Cheung Kong Holdings and Hutchison Whampoa and has cemented a reputation as a peerless deal-maker, having unloaded a stake in Indian mobile phone carrier Hutchison Essar to Vodafone for a tidy US$11 billion.
Last year, Forbes also ranked Mr Li ninth richest worldwide. His son, Richard, came in 24th in Hong Kong with US$1.52 billion. The Li influence runs so deep it's hard to spend a day in the city without enriching the family, which runs property, power and phone firms and supermarkets.
In second place are the Kwok brothers - Raymond, Thomas and Walter - who run Hong Kong's biggest property developer, Sun Hung Kai. They notched up a US$10 billion gain last year, giving them a combined fortune of US$24 billion.   - 2008 January 18   REUTERS 
Richest Chinese in the world

"Li Ka-shing, who swept Hong Kong factory floors and sold plastic watch bands and belts as a Chinese refugee before making property investments in the late 1950s that would form the foundation for his fortune, is known as ``Superman'' in Asia for his record of timing investments for maximum return.  He is Asia's richest man and his group is rated as aFortune 500 company.

He made a $15 billion profit in 1999 selling 49 percent of Orange Plc, a British mobile-phone operator he started five years earlier. The next year, he turned a $9 billion profit on the sale of 23 percent of U.S. wireless operator VoiceStream Wireless Corp. and made $750 million selling 35 percent of a U.K. wireless- phone license to Japan's NTT DoCoMo Inc. and KPN NV of the Netherlands.  -  2003 November 10  BLOOMBERG
Disney, Li Ka-shing involved in US$253m NBA China investment

Walt Disney Co's ESPN and four Chinese investors, including Hong Kong mogul Li Ka-shing, have agreed to pay US$253 million to acquire an 11 per cent stake in the National Basketball Association's operations in the country. 
ESPN, one of the NBA's broadcast partners, along with Mr Li, Bank of China Ltd, China Merchants Bank Co and Legend Holdings Ltd will join the NBA in forming NBA China, the league said in a press release yesterday. Mr Li is the richest man living in Asia with a US$23 billion fortune, according to Forbes magazine.
NBA China, valued at about US$2.3 billion, is being run by former Microsoft executive Tim Chen, who was appointed last September. It will be governed by a board of directors that will include representatives from the investors, as well as current NBA team owners and league officials.
NBA China will have the right to create teams in the country, and own all broadcasting and merchandising rights.
'The opportunity for basketball and the NBA in China is simply extraordinary,' NBA commissioner David Stern said in the release.
'The expertise, resources and shared vision of these immensely successful companies will help us to achieve the potential we see in the region.'
The NBA's popularity has grown in China with the success of Yao Ming, the NBA's top draft pick in 2002. The Chinese sports ministry says basketball is played by 300 million people in the country and is the most popular sport among youths.
The NBA has 16 marketing partnerships with China-based corporations and US-based companies doing business in China. It opened an office in Hong Kong in 1992 and employs 100 people in four offices in China.In 2004, the NBA became the first American sports league to play games in China, with contests in Beijing and Shanghai. It returned this season for three pre-season games in Shanghai and Macau. --  2008 January 16    BLOOMBERG
Amongst investors in Asia, he is known affectionately as "Superman"
The richest man in Asia built a global empire out of an ailing British conglomerateThe Hong Kong newspapers call him chiu yan (Superman), but at first glance the only thing Li Ka-shing has in common with Clark Kent is a pair of horn-rimmed glasses. This hardly bothers his legions of admirers. To them, this modest 78-year-old is the most successful Chinese businessman of his generation. Today, Li's fortune totals more than $18 billion. But less than 30 years ago, he was just a face in a crowd of aggressive Hong Kong businessmen trying to push past the entrenched foreign Taipans and their Shanghainese counterparts who ruled the roost in what was then a British colony. Born in the Chinese city of Chiu Chow, the son of a teacher, Li started by founding a Hong Kong plastics firm. He burst onto the public stage in 1979, when he made a deal giving him control of the ailing British-owned conglomerate Hutchison Whampoa. Li quickly used his new platform to build on Hutchison's ports, property and retailing assets, expanding into telecommunications, energy and beyond. As Li's empire grew so did a band of faithful followers who mobbed banks that handed out application forms for new issues of shares offered by his companies. Li made money for Hong Kong's small investors and they loved him, not just for that but also because he was seen as one of them—a little guy who had beaten the big guys at their own game.
As Li's power and influence grew it became clear that his real talent lay not just in having an uncanny eye for opportunities but also in knowing when to sell. He has long traded his property assets in Hong Kong, predicting the market's peaks and troughs with seeming clairvoyance, and he has applied his skills to other assets, too. In 1999, he sold the British-based Orange telephone network to Germany's Mannesmann for a $14.6 billion profit; within a year, the tech bubble burst and the value of such assets plummeted. Skeptics wondered why Li took control of Canada's Husky Oil in 1991 and suffered years of poor returns, but the company is now one of the jewels in the Li portfolio.
Feb. 23, 2004
In recent years, Li's trading finesse has drawn criticism from shareholders annoyed at the spinning off of assets, such as telecom companies, in a way that lines his pockets more than their own. There are also rumblings of discontent over the lack of transparency in Li's dealings. He recently helped finance a deal by a close associate, investment banker Francis Leung, to buy the assets of PCCW, the telecom firm controlled by his son Richard Li. At the time of the proposed sale, the younger Li maintained that his father was not involved in this politically sensitive deal, but later it came to light that he loaned Leung most of the cash for his deposit on the purchase.
Still, those who do business with Li know that when he gives his word, he keeps it. And lately he has further burnished his reputation by becoming perhaps Asia's most prominent philanthropist, showing the way in a region where tycoons have been relatively slow to shift from getting to giving. In August, he said he would give a sizeable portion of his wealth to his charitable foundation. In Chinese society, dazzling success is revered while envy exerts a far weaker pull on the imagination. That's why Li, the quintessentially successful businessman, remains a hero to so many. -  by 

Hutchison debt offering is raised to 5 billion
Hutchison Whampoa has increased the size of its global bond sale by 40 percent to $5 billion after encountering very strong demand from investors, people familiar with the offering said WednesdayHutchison, a conglomerate controlled by the Hong Kong billionaire Li Ka-Shing, increased size of the sale - already the largest ever global debt deal in Asia excluding Japan - from $3 billion, said the people, who requested anonymity. It would be the largest-ever corporate bond offering by an Asian company outside of Japan.
Hutchison has spent about $14 billion on high-speed mobile phone networks since 2000. It intends to use the proceeds to refinance debt. The company has about $2.9 billion of debt coming due in 2004, according to Bloomberg data.
Hutchison has divided the dollar-denominated offering into three portions with maturities of seven, 10 and 30 years. Investors are being offered a higher yield than companies with similar credit ratings to compensate investors for the risks of its so-called third-generation, or 3G, cellular business.
"Hutchison's investments in 3G introduce higher risks, which means they need to pay more," said John Teng, a fixed income analyst at Nomura International (Hong Kong). "There's a chance of a credit downgrade because of their exposure to 3G.
Hutchison has already borrowed about $4.5 billion from investors this year in four separate global offerings.
"They need to borrow to be able to do acquisitions and build the business," said Kunalan Sivapuniam, a fund manager at Chinkara Capital in Singapore
Hutchison said in bond-sale documents that there were no assurances that it would be able to fulfill its plans for 3G phone services, or that competition from lower-priced alternatives would not supercede 3G technology. 
Hutchison's 3G businesss had a 3.9 billion Hong Kong dollar, or $500 million, first-half loss, limiting the company's overall profit growth to 2 percent. Hutchison's credit rating was cut to A-minus in June by Standard Poor's because of the financing requirements
The willingness of investors to lend money to Hutchison stems in part from its other businesses, which span ports, retailing, real estate and oil. The group controls 14 percent of the world's container trade, three-quarters of Europe's biggest port operator and is China's largest foreign container operator.
"The fears over 3G are a bit overblown," said Desmond Soon, a fund manager at Pacific Asset Management. "The rest of the business - the cash cow - is stable."
Hutchison's latest offering is less than a third the siz of the world's largest corporate bond sale: a $16.4 billion transaction by France Telecom in March 2001.   - 2003 November 23   BLOOMBERG
Banks Press Hutchison to Sell Bonds
Goldman Sachs Group and HSBC Holdings are among several investment banks trying to persuade Hutchison Whampoa to sell bonds for a fifth time this year, each jostling to become the biggest arranger of Asian debt sales outside Japan.The banks are testing investor demand for about $1.5 billion of Hutchison bonds maturing in as long as 30 years, bankers involved said Monday. The ports and telecommunications company controlled by the Hong Kong billionaire Li Ka-shing has already sold $4.5 billion of bonds overseas this year, hiring one bank to manage each of the four offerings.
HSBC managed two of those sales, giving it top slot so far this year with $3.3 billion of global debt sales for companies in Asia excluding Japan, according to Bloomberg data. Merrill Lynch handled one and is currently in second place with $2.5 billion worth of bond deals, and Goldman managed one and is fifth with $1.4 billion of bond sales. Top rankings help banks win business.
"Banks will be aggressively pursuing this opportunity to improve their league table position," said Frits Jan Algera, a debt banker at ABN AMRO Holdings in Hong Kong.
"It's a good time for Hutchison to sell bonds as rates are relatively low and demand for its credit is high."
A higher league table ranking may give a bank an edge when bidding to manage planned sales by the governments of Malaysia, Indonesia and the Philippines, as well as such companies as Korea Electric Power, Korea Gas and Pertamina, Indonesia's state oil company.
Bankers at the firms that are heading the league tables declined to comment. Laura Cheung, a Hutchison spokeswoman, also declined to comment.
Hutchison may be tempted into a fifth bond sale because it needs to fund new phone services and has $2.8 billion of debt maturing next year.
The company, Asia's biggest investor in faster mobile-phone networks in Europe, budgeted E18.2 billion, or $21 billion, for the business, and had spent about two-thirds of this by June 30.   -- BLOOMBERG NEWS    2003 October 13
Goldman wins Hutchison deal
Goldman Sachs Group Inc. has won the right to sell $1 billion of bonds for Hutchison Whampoa Ltd. by offering its services for free.Goldman bought the securities in advance, shouldering the risk that they would decline before investors bought them, bond-sale documents show. It did not collect an underwriting fee, according to the documents.
Two months ago, Merrill Lynch Co. earned $29 million for arranging a $1.5 billion bond sale by the Hong Kong communications and property conglomerate controlled by the billionaire Li Ka-shing.
Hutchison's bond sale "is a loss leader" for Goldman, said Henry Lee, founder of the investment firm Hendale Group, which manages $100 million. "They were snubbed by Li in February and needed to do something to get back into the frame."
Hutchison, whose businesses range from ports to European mobile-phone networks, has been a Goldman client for a decade. Li's companies have paid about $250 million in fees in the past five years, bankers said. Hutchison has accounted for more than a third of the $6.8 billion worth of global bonds sold by Asian companies outside Japan so far this year, Bloomberg data show.
Arranging the Hutchison bond sale made Goldman the second-ranked manager of global debt offerings in Asia outside Japan this year, up from 16th in 2002, according to figures compiled by Bloomberg. Merrill Lynch is ranked number one.
Michael Carr, Goldman's head of Asian investment banking, was not available to comment Wednesday. Spokespeople for the bank declined to comment.
In two previous bond sales, Hutchison paid 0.45 percent of the total proceeds in fees. Goldman's sale was a reopening of an earlier issue of 10-year securities arranged by Merrill Lynch. Fees on such secondary transactions are typically lower because the legal, promotional and administrative work has already been done.
Hutchison may provide banks with more business this year as it seeks funds to expand its $16.7 billion high-speed mobile Internet services to nine European countries from two. Hutchison must also repay $6 billion of debt by the end of 2004, and it may add to 13 container terminals it bought in the past two years   - 2003 April 16    BLOOMBERG
How Does the Group Operate?
A financial powerhouse that employs now 260,000 employees in 52 countries around the world, and surprisingly most decisions are effected by a handful of key lieutenants.  They are amongst the world's most exceptional Dealmakers with networks to the world's top decision makers and operators.  They are especially efficient at seamless teams working 24-7 even before the Tech boom.      But then how do these executives survive hitting the pavement three different continents a week?    Air miles, are not really a bonus in this instance, as the treat is to be able to stay grounded and best crystal and polished silverware at home is the best treat.  Discussion with varying values so that the Li's can select the optimum investment.   -- ANDREA ENG
 
CONGLOMERATE:                     HUTCHISON WHAMPOAPRINCIPAL SHAREHOLDER:         CHEUNG KONG HOLDING
CHEUNG KONG (HOLDINGS) LIMITED
Cheung Kong (Holdings) Limited is a property development and global investment coglomerate based in Hong Kong.  It is one of the largest property developers in Hong Kong having developed about one in twelve private residences in the territory.  The company also owns a large portfolio of commercial, residential and industrial premises in Hong Kong, and is a major landlord of the Central District. 
In Singapore, Cheung Kong's property portfolio includes several significant investments including Suntec City and Reit.
They have also brought their real estate expetise to other continents.
PRESS 
The Legend internal sales reap $5b for Cheung Kong
Cheung Kong (Holdings), a property developer controlled by billionaire Li Ka-shing, said it has pocketed about HK$5 billion from internal sales of its luxury apartment project The Legend, which analysts estimate represents a profit margin of more than 200 percent.
Cheung Kong said Monday it sold 212 units over a nine-day period to last Sunday, with prices ranging from HK$13,000 to HK$23,000 per square foot.
The three-block development in Tai Hang, near Causeway Bay, has 376 units, with analysts estimating the total development cost at about HK$4,700 psf. Cheung Kong could reap as much as HK$10 billion in sales, compared with the likely development cost of HK$3 billion. This estimated cost consists of a HK$100 million payment to the previous owner of the land, HK$900 million in land premiums to the government and HK$2 billion in construction costs, a property analyst at an investment bank said.
``After 1997, this kind of profit margin is extremely rare,'' he added.
Cheung Kong's Kingswood Villa project in Tin Shui Wai, launched in the early 1990s before the Asian financial crisis halved property values in the city, was sold for HK$5,000 psf, or five times over the development cost of HK$1,000 psf, market watchers said.
Cheung Kong senior sales manager Francis Wong said the company may halt sales at The Legend shortly after the public launch Thursday and keep some units for sale until after the government's policy address in October. It may also keep some units for sale next year.
Although local banks are raising mortgage rates, Wong said prices for luxury flats could rise by a further 10 to 15 percent this year.
Prices of luxury apartments on Hong Kong Island have risen about 20 to 30 percent this year, due to limited new supply.
David Cheung, senior director at property consultant Savills, said that although the HK$3 billion construction cost estimate was ``reasonable,'' whether Cheung Kong could hit HK$10 billion will depend on prices for the remaining units.
He added that ``the really expensive units'' have not yet been released for sale.-    THE STANDARD    5 July 2005                             >> More about HONG KONG PROPERTY
Li Ka-shing project courts super-rich mainlanders
First time a HK developer is targeting China tycoons

Li Ka-shing is hoping millionaire capitalists in communist China will snap up his fancy Kowloon waterfront apartments for HK$20 million (S$4.6 million) apiece. Built by Cheung Kong Holdings, the HarbourFront Landmark in Hung Hom offers luxury apartments of 2,000 sq ft each, which is huge by Hong Kong standards.
The marketing of the project to China millionaires marks the first time a Hong Kong property developer is actively targeting the mainland tycoon market, say analysts
Cheung Kong has asked two real estate agents with branches on the mainland to look for millionaires with a yen for Hong Kong property. While Cheung Kong may not foot the airfares, it will put the interested buyers up at its Harbour Plaza hotel in Hung Hom. Executive director Justin Chiu even met a party of potential buyers from Shanghai at Chek Lap Kok airport last Saturday, before whisking them away to view the project.
Aggressive marketing is not unusual in a market where the number of unoccupied homes hit a record high of 60,500 units last year. Estimates show that this year, another 30,000 units are likely to be completed. But while some Hongkongers prefer to buy cheaper property immediately across the border, an increasing number of super-rich mainlanders are showing interest in Hong Kong's property market.
There are no figures on how many units are bought by mainland buyers each year. But John Saunders, head of property research at Credit Lyonnais Securities Asia, said: 'If you look at buyers of larger units in super high-end luxury apartments, there is a lot of activity by mainland Chinese. It's too early to say, but it's likely to be an increasing trend.'
Kenneth Yuen, advertising manager at Cheung Kong, said that the response from mainland buyers has been good. Cheung Kong has signed up two mainland buyers from Chongqing and Chengdu so far for the HarbourFront development, while the parties who visited over the weekend are still 'considering'.
The mainland tycoons are interested in the better units on higher floors within the development, with an average price-tag of HK$20 million, he said.
'The reason we are (targeting this market) is that in China, people are getting richer and richer. They also view Hong Kong as a gateway to doing business with the outside world. Most of them are looking not just for offices in Hong Kong, but also for their own apartments,' he said.
Midland Surveyors is one of the two agents marketing the project for Cheung Kong in China. Director Ronald Cheung said: 'Generally, we are seeing an increasing number of mainlanders among our clients. Most buy for their own use, a few buy for investment.' For the HarbourFront development, his company is targeting rich industrialists from Guangdong who have business in Hong Kong.
These businessmen have to travel frequently between Hong Kong and Guangdong, and will prefer apartments along the Kowloon-Canton Railway such as HarbourFront, he said.
Besides its location, the development has another draw. Cheung Kong said that after signing up to buy the apartments, the two buyers from Chongqing and Chengdu also asked to buy 1,000 Cheung Kong shares. Then they asked if chairman Li Ka-shing could autograph their share certificates.
The Li brand name makes it easier for Cheung Kong to market its projects on the mainland, said Mr Cheung. 'Of course, they know about Cheung Kong in China. No one will not know the name of Li Ka-shing,' he said  SINGAPORE STRAITS TIMES   Nov 28 2002  
SINGAPORE
Partners win Raffles site 
A blue chip consortium of Cheung Kong (Holdings), Hongkong Land and Keppel Land was awarded the tender for a site at Raffles Quay and Marina Boulevard in Singapore for S$461.81 million.  The  99-year lease allows commercial, residential and hotel development of up to 147,770 sq m.  The tender closed on 13 March and attracted bidders from Taiwan as well. - 2001
Cairnhill
 
A Company controlled by Hongkong tycoon Li Ka-Shing bagged the freehold Cairnhill Court for S$315 million.  This will make it the biggest collective sale to date, property sources told Singapore Business Times.

According to BizTimes source, the company, Property Enterprises, is also negotiating to buy a 30,530 sq ft freehold bungalow plot nest door.

The $315 million price tag will be a record price for a collectivesale.  The previous record of $251 million was set by Kim Lin Mansion, which was sold last year to City Developments.  

A new  condo project on the site, which is near Cairnhill Hotel, is likely to break even around $1,500 psf, going by the average prices being fetched at Scotts 28.
Property Enterprises developed the Thomson 800 condo and is expected to launch this year the 906-unit Coast del Sol condo in the eastern part of Singapore. - 2001
HONG KONG
Cheung Kong (Holdings) is set for a bumper year in property sales after already cashing in more than its HK$12 billion revenue target on the sale of 3,500 units, executive director Justin Chiu said.
Sales revenue to date is almost double the HK$6.21 billion received last year, due to strong sales of Victoria Tower in Tsim Sha Tsui, Banyan Garden in Cheung Sha Wan, and Harbourfront Landmark in Hung Hom.
The blue-chip developer is aiming to boost its property sales further by launching another four projects this year in a bid to capture the improving buyer sentiment, Chiu said.
It will launch the third and final phase of Banyan Garden this week and expects to reap HK$1.8 billion to HK$2 billion from the 760 units.
``It will be a bumper harvest for Cheung Kong this year,'' Chiu said. ``The recent message from the government [to stabilise the property market] is a strong shot in the arm ... the administration has shown its determination. After all, property market still dominates a large part of the local economy.'' He said buyer confidence had been growing recently. ``We don't foresee property prices surging rapidly in the near future but expect them to improve steadily.'' Sales manager Francis Wong said Cheung Kong had pocketed HK$3 billion from the sale of 1,650 of the 1,700 units in the last phase of Banyan Garden.
He said pricing of the final phase could be up to 5 per cent higher that the average of HK$3,100 per sq ft for the first two phases.
The other three projects in the pipeline are the luxury One Beacon Hill development in Kowloon Tong, the Metropolis Suite in Hung Hom and Queen's Terrace in Sheung Wan.
Chiu said the luxury property market had picked up steam in recently months. ``There is a recent trend that the luxury market in Kowloon is overtaking Hong Kong Island in terms of volume of transactions,'' he said.
Sales of residential projects over the weekend were not strong, with only 61 units from six projects being sold, agents said. They said many potential buyers were awaiting a detailed statement by government on measures to prop up property prices.   - Foster Wong    HONG KONG STANDARD     27 October 2002
PROJECTS
HONG KONG: Hunghom          
Harbourfront to offer serviced apartments
Cheung Kong (Holdings) intends to turn three storeys of its Harbourfront Landmark development in Hung Hom into serviced apartments.
The floors, in the main building of the three-tower project, were supposed to be developed into a shopping plaza under the original plan.
``Earlier, we heard the developer intended to turn the shopping area into offices for Hutchison Whampoa staff,'' a source said. ``The latest plan is for serviced apartments.''
Harbourfront Landmark, a joint venture with Hutchison Whampoa, has 324 units, ranging from 1,903 square feet to 2,500 sq ft, in three 72-storey towers.
The source expressed reservation over reports claiming that Cheung Kong planned to turn the shopping area into a hotel - an extension of its nearby Harbour Plaza Hotel.
``There are no facilities at Harbourfront Landmark to support clients' accommodation if they take the hotel option,'' the source said.
Cheung Kong could not be reached for comment yesterday.
The developer is required to seek Town Planning Board approval if it wants to change from residential use to serviced apartments or hotel use.
Luxury flats at the 233-metre development, the tallest residential building in the world, have attracted interest from mainland tycoons and investors. About 15 per cent of some 120 units have been sold so far.
Tower Three, which comprises 102 apartments of either 1,891 sq ft or 2,156 sq ft with three or four bedrooms, is now available for lease.
About 20 units in Tower One and Tower Two are also available for rent at about HK$30 psf.
Separately, Cheung Kong senior sales manager Joseph Lau yesterday estimated the company would reap HK$2 billion from the sale of all 662 serviced apartment units at its Metropolis project. He said the company planned to launch standard units for sale at around HK$4,500 psf.   -   8 January 2003   HONG KONG STANDARD
Cheung Kong (Holdings) is kicking off its aggressive leasing campaign by giving away a HK$304,000 Mercedes-Benz sedan to three-year term tenants of its Laguna Verde apartments in Hunghom.
However, property agents said the effective rent charged by Cheung Kong was still slightly higher than the secondary market, despite the various sweeteners given to tenants.
Cheung Kong executive director Justin Chiu Kwok-hung said average rents at Laguna would be about HK$30 per square foot a month but some presents and coupons would be given to tenants.
He said the developer would release 20 units at Tower 16 of Laguna Verde phase four, which was almost complete, for lease.
It has reserved 100 large units in phase four and 120 units in phase five for lease. More than 100 units from the neighbouring Harbourfront Landmark will also be reserved for lease.
For the first 20 Laguna Verde units, tenants will receive a Mercedes C200K sedan if they rent a unit for between HK$46,000 and HK$50,000 per month for three years. If units are rented at HK$42,500 to HK$46,000 for one year, they will receive an 18-carat gold lady's watch worth HK$99,500. Flats at HK$37,700 to HK$40,700 on a one-year lease will entitle tenants to a HK$26,000 Bang & Olufsen television and stereo system.
Coupons worth HK$3,300 will be available for use in ParknShop stores, restaurants at Harbour Plaza Hotel in Hunghom, newspaper subscription and laundry services. Cheung Kong also will be responsible for expenses such as water, electricity and rates.
Centaline Property Agency manager Ken Lee said Laguna Verde apartments were rented at HK$23 to HK$24 per square feet in the secondary market.
After stripping the value of presents, coupons and other benefits, he estimated the net rent charged by Cheung Kong was about HK$25 to HK$26 per square feet, slightly higher than second-hand rentals, he said.
However, Mr Lee said the package would be attractive to corporate clients, who under the scheme need not handle various expenses.      - SOUTH CHINA MORNING POST        December 13, 2001
Cheung Kong makes buy-back vow with flats      
Cheung Kong (Holdings) is offering to buy back flats for 98 per cent of their selling price from purchasers at its Laguna Verde complex in Hunghom.
The three-year guarantee reflects intense competition in a sluggish market.
It is the latest of a series of increasingly generous incentive offers aimed at speeding up sales after several months of listless trade.
Other incentives include immediate cash rebates, mortgage subsidies and low interest rate loans.
Cheung Kong executive director Justin Chiu Kwok-hung said the buy-back scheme demonstrated the developer's confidence in the project and its price prospects.
Last year, Henderson Land Development offered a one-year buy-back scheme for Parkland Villa in Tuen Mun, while Cheung Kong offered a seven-month guarantee for Monte Vista in Ma On Shan.
Analysts said the latest incentive was an attempt to drum up buyer confidence and boost the moribund property market.
There are fears of further discount sales as developers step up marketing for their large backlogs of flats.
Cheung Kong is offering Laguna Verde buyers a cash-rebate scheme of up to 17 per cent of their property's price to be refunded in three years. Buyers taking this option are not eligible for the buy-back scheme and need to pay a 5 per cent price premium.
The buy-back and rebate packages are available for the last 175 units for sale at Laguna Verde.
Cheung Kong has retained more than 100 units for lease. It will release 23 units at an average price of HK$4,245 per square foot on a first-come, first-served basis on Saturday.
Under the buy-back scheme, buyers need a 30 per cent down-payment but Cheung Kong will be responsible for the monthly installments of the 70 per cent bank mortgage for the first three years.
Under the cash-rebate scheme, Cheung Kong will rebate cash to buyers every month at an annual rate of 5.65 per cent of the purchase price for the first three years.
Mr Chiu said the buy-back scheme could be used only for quality projects with the potential for capital appreciation. As the market had stabalised, he said Cheung Kong was very likely to extend this scheme to other projects.
Mr Chiu said it had raised by 3 per cent to 5 per cent the prices of flats at Tower Five of its Caribbean Coast project in Tung Chung.
Most of the 2,100 units at Laguna Verde phases four and five have been sold for about HK$6 billion.
At Caribbean Coast, 952 units have been sold since its recent launch with sales revenue of HK$2.06 billion, according to the developer.
Fortune Realty managing director James Tin Kwok-keung said Cheung Kong's packages were aimed at keeping property prices stable and boosting confidence.
The rebate scheme would mean an effective 10 per cent price cut, which was in line with the downturn for middle-end properties after the terrorist attacks on the United States, he said.
Today Sino Land will offer Horizon Place in Kwai Chung in a public sale. Tomorrow New World Development and Henderson Land will announce the sale of Sereno Verde in Yuen Long, while Sun Hung Kai Properties is preparing the release of Park Central in Tseung Kwan O.     - SOUTH CHINA MORNING POST                 
Cheung Kong (Holdings) has taken significant strategic steps in expanding its property empire in Hunghom after clinching a large commercial site at yesterday's Government auction.
Analysts said the Hunghom site could pave the way for a joint development or possible links with a neighbouring commercial lot on the waterfront bought by Sino China Enterprises in August.
Sino China is believed to be linked to Li Ka-shing's property giant.
Cheung Kong made no mention about a possible combination of the two sites and deputy chairman Victor Li Tzar-kuoi said it still had legal matters to settle with Sino China regarding Cheung Kong's involvement in the previous site.
The two sites, sitting on reclaimed land in Hunghom Bay, were widely seen to fit in with Cheung Kong's business strategy of expanding its presence in the district.
Insignia Brooke consultant Nicholas Brooke said: "Cheung Kong has clearly made the area their territory. It has put a stamp on Hunghom."
While the prevailing unfavourable market conditions and the significant development costs had affected confidence, Mr Brooke said Cheung Kong's acquisition would prove to be a good investment in the long term.
The site auctioned yesterday is north of the waterfront site sold in August and east of The Metropolis commercial complex - a joint venture between Cheung Kong, its associate Hutchison Whampoa and the Kowloon-Canton Railway Corp.
Analysts said the two sites, combined with The Metropolis, could create a commercial property portfolio of 3.84 million square feet near Hunghom Station - comparable to Wharf (Holdings') Harbour City complex in Tsim Sha Tsui.
The Metropolis phase one, just completed, comprises a 700-room hotel, a 15-storey office tower, 360,000 sq ft of retail space and 200 parking spaces - totalling 1.04 million sq ft. Phase two will have two towers of serviced apartments with 377,000 sq ft to be finished by the first half of next year.
Hampton Victoria Properties director Simon Chow said the Hunghom site auctioned yesterday was strategically important to Cheung Kong because it would be easier to link this site by footbridge or tunnel to The Metropolis than linking The Metropolis directly with the waterfront site bought by Sino China.
He said the waterfront site was suitable for the development of a large-scale shopping centre which required more car-parking facilities than the site's own provision.
The site sold yesterday with a provision of a 175,453 sq ft public car park which would help provide sufficient car-parking spaces as a complementary facility, he said.
Cheung Kong has been in talks with the railway company to buy out its stake in The Metropolis. But Mr Brooke suggested it might not be a good time for the railway company to sell its stake in view of subdued land prices.
The acquisitions come amid a new round of expansion by Cheung Kong and Hutchison in Hunghom where they have built up a strong property presence since early 1980s.
Hutchison built the 88-block Whampoa Garden housing development where it still owns 1.7 million sq ft of shopping space. Cheung Kong is building the 25-block Laguna Verde residential project, a joint venture with CLP Holdings.
Hutchison owns the Harbour-front twin-tower office complex and neighbouring Harbour Plaza Hong Kong hotel in the district.
Cheung Kong and Hutchison are jointly building the 324-unit Harbourfront Landmark residential development, which rises to about 70 storeys, on a site they bought for HK$6.06 billion at auction in 1997.
Cheung Kong also reached agreement four years ago with the railway company to build a 88-storey hotel above the railway tracks in Hunghom Station.
However, the project was cancelled.   SOUTH CHINA MORNING POST
AP LEI CHAU
Hongkong Electric and its ultimate parent Cheung Kong (Holdings) want to redevelop a car-park building within the South Horizons housing estate at Ap Lei Chau into a 16-storey hotel.
It is the electricity provider's second attempt to change the land use of the site.
Previously it intended to change the land and its neighbouring electricity transformer centre to residential use but withdrew the plan amid pressure from residents.
The new proposal is to convert the 68,029 square feet site into an 850-room hotel development.
It could provide a total floor area of 635,087 sq ft with a plot ratio of 9.3 times. The Town Planning Board is expected to discuss the proposal within two months.
The earlier proposal was for two 60-storey residential towers with more than 900 flats.   -SOUTH CHINA MORNING POST
Li Ka-shing and Richard bookend SAR's rich list
Tycoon Li Ka-shing and his son Richard Li have been placed first and last in a list of Hong Kong's 11 wealthiest billionaires, as ranked by Forbes magazine.Tycoon Li, 74, whose empire covers everything from ports to telecommunications, saw his world ranking drop to No28 but not surprisingly managed to maintain his regional lead despite his net worth declining to US$7.8 billion (HK$60.84 billion).
Likewise, Richard Li, one of 25 billionaires under the age of 40, also saw his fortunes dwindle, ranking him a distant 427th with US$1 billion. He hit the headlines in 2000 when his PCCW merged with Cable & Wireless HKT in Asia's biggest acquisition.
Of Hong Kong's 11 super-rich, more than half are involved in real estate and all of them, with the exception of Chinachem chairwoman Nina Wang, saw a drop in their net worth. Property prices have lost about two-thirds of their value since peaking in 1997.
Hong Kong's two ranked gaming moguls, Stanley Ho and Henry Fok, faired slightly better. Ho, who recently lost his monopoly over Macau's lucrative gambling industry, saw his US$1.4 billion boost his rank to 303rd while Fok experienced no change and tied with PCCW's Li in 427th place.
On the region's top 10 list, Li Ka-shing was followed in third place by the three Kwok brothers of Sun Hung Kai Properties, Walter, Thomas and Raymond, with a combined net worth of US$6.6 billion while Henderson Land Development's Lee Shau-kee dropped to ninth with US$3.7 billion.
Japan, which lost six billionaires this year but still has 19, had five representatives in Asia's top 10. Beverage giant Nobutada Saji and family, with a combined net worth of US$7.1 billion, fell to No2.
Fifth to eighth place were also taken by Japan. Yasuo Takei and family's US$5 billion credit business declined to No5, followed by golf course giant Eitaro Itoyama, who pulled in US$4.1 billion, and real estate moguls Fukuzo Iwasaki and Akira Mori, with US$4.1 billion each, all of whom rose in the rankings.
Indian software entrepreneur Azim Premji, the subcontinent's sole top-10 representative in Asia, fell to fourth place with US$5.9 billion.
Elsewhere, there were few surprises. Microsoft's Bill Gates saw his net worth plunge more than US$10 billion but still topped the global ranks with US$40.7 billion. The global club of billionaires shrank amid slumping stock markets to 476 from 497 last year and 538 in 2001.
The names at the top of the list of fabulously wealthy were largely the same as a year earlier, albeit somewhat less rich.
Even legendary investor Warren Buffett - No 2 on the Forbes list - was unable to avoid losing money, and now has estimated net worth of US$30.5 billion, down US$4.5 billion from a year ago.
German brothers Karl and Theo Albrecht, the reclusive owners of the Aldi supermarket chain, were listed as No 3 in the global fortune stakes with US$25.6 billion, down from US$26.8 billion.
Gates' high-tech arch-rival, Larry Ellison of Oracle, was ranked sixth with US$16.6 billion.
Of special note is US media darling Oprah Winfrey, whose debut on the list with US$1 billion marks her as the first African-American female to appear on it      - Dennis Eng     HONG KONG STANDARD   1 March 2003

Li Ka-Shing is well-known for recruiting the best management talent in the world.   

When we joined Richard Li who started and sold STAR TV for the group, we joined an elite gathering of the the best brains in the industry in the world.    A LOT of women, each specialists in their field, and we were all under 40!"   
My first question to the twenty-something Caucasian girl beside me was "How did you come to this organization?".   To which she replied " I wrote an article for WIRE magazine when I was studing law at Yale and Richard [Li] read the article and sent me a ticket and requested an interview.   And I haven't left Hong Kong since...".     Each of us in the start-up group at Pacific Century were under 40 years old, and each amongst the world's top professional in each our respecitive field.  All worked 24 | 7  to keep up with our globe-trotting energetic young boss.
The fraternity amongst professionals at related companies has endured now over a  decade as just a handful of individuals have a network and deal-making experience that covers five continents in a variety of legal systems.    We have saved a few articles on our friends whose investment includes a congolomerate  that operates in 52 countries with 260,000 employees.
Canning Fok again best paid among execs of listed firms

Hong Kong's highest-paid director at a listed firm earned a stellar HK$130 million (S$25 million) last year, joining a small club of elite executives in the financial services industry who are scoring mega salaries as capital continues to flow into the region.

Hutchison Whampoa managing director Canning Fok Kin-ning continues his reign as the city's highest paid executive at a public company, taking home a total of HK$130.94 million - of which HK$119 million was a bonus - in 2006.
His boss, Li Ka-shing, continued with tradition and took home a token director's fee, but earned dividends of close to HK$2.2 billion from his property flagship Cheung Kong (Holdings) in 2006.
Although Mr Fok's total payout was slightly lower than that of 2005, it reflects the general mood of the financial services sector, where salaries have been among the best ever over the past 12 months.
Headhunters, however, stress that there is just a handful in Mr Fok's league - four or five individuals at the bulge bracket investment banks that have helped score mega China deals over the past year.   - 2007 Aoril 21   BUSINESS TIMES
Hong Kong's high roller
Canning Fok is still adamant that his massive bet on 3G telecoms services will pay off
 
2005 January 6  from the print edition
In a  city with a passion for gambling, it is fitting that the biggest bet in Hong Kong's recent history has been laid by its top company: Hutchison Whampoa has staked $22 billion on the global success of third generation (3G) mobile-phone services.
Though Hutchison is controlled by Li Ka-shing, Asia's richest man, and his son Victor is deputy chairman, the investment in 3G, which (among other things) enables users to download music and make video calls on their phones, has become associated with Canning Fok, the group's managing director for the past 12 years and a long-time aide-de-camp of Mr Li senior. Given the huge cost of buying licences and building infrastructure, start-up losses and early setbacks—clunky handsets, patchy coverage and slow data downloads—it is not surprising that the 3G adventure unsettled investors. Eighteen months ago it strained the finances of Hutchison, a ports-to-property-to-retailing conglomerate with nearly $19 billion in revenues and almost $2 billion in net profits in 2003, and even threatened Mr Fok's job.

Today, the rotund 53-year-old with a trademark pudding-bowl haircut has regained his boyish grin. Subscriber numbers in Britain, Italy and several smaller countries—which failed to hit his predicted 1m by the end of 2003—soared to almost 6m in December 2004, well above forecasts. “Demand is tremendous,” boasts Mr Fok. He demonstrates new, improved 3G handsets with childlike enthusiasm. “This LG model is selling like hotcakes,” he says, calling up the latest soccer scores and a live video clip of Hong Kong's traffic jams while dismissing this reporter's PDA-phone: “I don't believe in handheld computers.”
Mr Fok spends 60% of his time on 3G, checks updated subscriber figures every two hours until his bedtime at 2am and accuses the media of being too “emotional” about the issue. But he feels good about the decision to plough the nearly $20 billion windfall Hutchison made from selling Orange, its 2G telecoms operator, to Germany's Mannesmann (it was later sold on to France Telecom) in 1999 at the peak of the telecoms boom, straight back into 3G—which he says will make its first operating profit in 2006.
Many industry experts remain sceptical. Hutchison is courting subscribers by subsidising handsets, even giving away some phones, as well as offering free minutes, free text messaging and low-margin pre-paid plans. “It is easy to get carried away with the subscriber numbers. We are concerned that Hutchison won't make an economic return in this decade,” says Chris Alliott, an analyst at Nomura, an investment bank.
And as the cost of acquiring a 3G customer rises (to €270 in November from €252 in July) Hutchison's annual average revenue per user is falling—from €51.5 to €44.5 in the same period. Another analyst says that subscribers mainly want Hutchison's 3G service because it offers the cheapest voice telephony, not for its lucrative data downloads, and that average revenue figures are misleadingly reported “gross”, before discounts. One Hong Kong tycoon, a friend of Mr Fok, is unconvinced: “3G is a gamble that I don't think will work. Who really wants video conferencing? Think how disastrous it could be for Hong Kong men if their wives call when they are with their mistresses. And I don't want business partners seeing who else I am doing deals with.”
Hutchison has been discounting so aggressively to capitalise on its early launch by locking in customers. But since November it has faced increased competition in Europe from Vodafone, the world's leading wireless provider, and two of the other five mobile operators in Hong Kong—SmarTone and CSL—launched 3G in December. Partly as a result, Cusson Leung, an analyst at Merrill Lynch, expects Hutchison's 3G operations to make an operating loss of $1.3 billion in 2006—when Mr Fok expects to be in the black—plus almost $1 billion in associated interest costs.
Even though Hutchison would be big enough to shoulder such a burden, it is hard to shake the impression that its obsession with 3G has distorted management priorities. Analysts accuse the group of selling some of its best assets, such as its stake in Procter & Gamble's Chinese consumer goods operation, to produce exceptional gains and so compensate for 3G losses—something Mr Fok denies. The group's stake in Canada's Husky Oil, highly profitable at current prices, may be on the block next, reinforcing Hutchison's reputation as an asset trader rather than a builder of businesses. Mr Fok bristles at that description.
In response to such criticisms, Hutchison has tweaked its strategy, floating minority stakes in various businesses to raise money while retaining control. For instance, most of its smaller telecoms operations, grouped as HTIL, now have a minority stake listed in Hong Kong. In December, Mr Fok talked about an early flotation of its Italian 3G business. Hutchison claims that such financial engineering reveals to investors the hidden value it has created. But the fact that its shares trade at just 1.2 times net asset value and at a discount to the Hong Kong market average suggests that the conglomerate pays a price for its complexity.
The wrong call?An arguably even bigger criticism relates to the opportunity costs associated with 3G. With China on its doorstep and Mr Li's excellent connections there, Hutchison could surely have invested its Orange windfall more profitably on the mainland, where it already has property, infrastructure and retailing interests. Mr Fok says it is expanding as fast as it can in China. But that is probably true only of ports. Though it is growing in retailing, for instance, Hutchison still owns only 27 supermarkets and 100 drug stores on the mainland, compared with 3,500 stores in Europe. In property and in building materials, other Hong Kong investors, such as Vincent Lo's Shui On group, have pulled ahead. Hutchison's bet on 3G is not the disaster it threatened to become a year ago. But Mr Fok surely has more long nights ahead. - 2005 January 6      THE ECONOMIST
Fok tops Hutchison wage list at $343,150 per day
Hutchison Whampoa group managing director Canning Fok Kin-ning, long reputed to be Hong Kong's highest-paid executive, made $343,150 every day last year - a fact revealed yesterday when the Li Ka-shing-controlled conglomerate became one of the first blue-chip companies to list directors' pay by name.
The company's annual report, released online yesterday, shows Mr Fok made $125.28 million last year. His boss, Cheung Kong and Hutchison chairman Mr Li, made $60,000 for the whole year - all from director's fees.
Mr Li is understood to make a lot more money from his share-trading activities.
Hong Kong's median monthly wage is $9,500.
Mr Fok's pay package, which included a $113.5 million bonus on top of a salary of $9.77 million, accounted for 48.2 per cent of the money Hutchison spent on its directors.
Mr Li's eldest son, Victor Li Tzar-kuoi, had a higher salary as managing director of Cheung Kong - $27.62 million - but trailed badly in the bonus stakes, picking up $30.52 million from Hutchison and a relatively paltry $4.36 million from Cheung Kong. Including the $4.44 million he was paid in salary as deputy chairman of Hutchison, Victor Li made a total of $69.78 million last year.
Mr Fok, the chief spokesman and salesman for Hutchison's troubled global third-generation mobile-phone roll-out, does not appear to have earned a pay rise last year. In 2002, he was understood to have made between $125 million and $125.5 million.
Hutchison's deputy managing director, Susan Chow Woo Mo-fong, made $34.46 million last year, including $26 million in bonus payments, while finance director Frank Sixt made $32.67 million.
The listing of directors' pay by name in annual reports became mandatory from Thursday under stock exchange listing rules implemented after more than two years of heated debate.
In the past, companies were only required to disclose the pay of top directors in band form without identification, a policy lagging international standards that was criticised for lacking transparency.
The exchange introduced the change despite fierce opposition from many company directors, with some arguing that disclosure of pay by name could make them kidnap targets. In May 1996, Victor Li was kidnapped in Deep Water Bay Road. He was released a day later after a ransom was paid.
Hutchison Whampoa group managing director Canning Fok Kin-ning, long reputed to be Hong Kong's highest-paid executive, made $343,150 every day last year - a fact revealed yesterday when the Li Ka-shing-controlled conglomerate became one of the first blue-chip companies to list directors' pay by name.
The company's annual report, released online yesterday, shows Mr Fok made $125.28 million last year. His boss, Cheung Kong and Hutchison chairman Mr Li, made $60,000 for the whole year - all from director's fees.
Mr Li is understood to make a lot more money from his share-trading activities.
Hong Kong's median monthly wage is $9,500.
Mr Fok's pay package, which included a $113.5 million bonus on top of a salary of $9.77 million, accounted for 48.2 per cent of the money Hutchison spent on its directors.
Mr Li's eldest son, Victor Li Tzar-kuoi, had a higher salary as managing director of Cheung Kong - $27.62 million - but trailed badly in the bonus stakes, picking up $30.52 million from Hutchison and a relatively paltry $4.36 million from Cheung Kong. Including the $4.44 million he was paid in salary as deputy chairman of Hutchison, Victor Li made a total of $69.78 million last year.
Mr Fok, the chief spokesman and salesman for Hutchison's troubled global third-generation mobile-phone roll-out, does not appear to have earned a pay rise last year. In 2002, he was understood to have made between $125 million and $125.5 million.
Hutchison's deputy managing director, Susan Chow Woo Mo-fong, made $34.46 million last year, including $26 million in bonus payments, while finance director Frank Sixt made $32.67 million.
The listing of directors' pay by name in annual reports became mandatory from Thursday under stock exchange listing rules implemented after more than two years of heated debate.
In the past, companies were only required to disclose the pay of top directors in band form without identification, a policy lagging international standards that was criticised for lacking transparency.
The exchange introduced the change despite fierce opposition from many company directors, with some arguing that disclosure of pay by name could make them kidnap targets. In May 1996, Victor Li was kidnapped in Deep Water Bay Road. He was released a day later after a ransom was paid.-   2004  April 3  by Sidney Luk SOUTH CHINA MORNING POST
Hutchison's No 2 earned HK$125m in 2002
His boss may be richer but Canning Fok, managing director of Hutchison Whampoa Ltd, continues to do well for himself.
Li Ka-shing's right-hand man is believed to have been paid about HK$125 million (S$28 million) in 2002, a 19 per cent raise from the previous year, based on information in the annual report of the sprawling ports-to-telecoms conglomerate. Hutchison chairman Mr Li, Asia's wealthiest businessman, was paid a mere HK$50,000 director's fee, which he turned over to sister firm Cheung Kong (Holdings), the report said.
The report did not identify Mr Fok by name as the highest-paid director, but he is widely believed to be the recipient of the fattest pay packet at the company, whose shares had slid 38 per cent in the 52 weeks through Monday.
Forbes magazine last year identified him as the highest-paid executive in 2001 among the world's 50 largest firms outside of the United States by market capitalisation, earning an estimated US$13 million that year.
In 1999 a Hutchison director - widely believed to be Mr Fok - took home a US$26.4 million bonus after Hutchison scored a hefty US$15.12 billion profit on the sale of its Orange mobile phone business to Germany's Mannesmann. - REUTERS   BUSINESS TIMES 02 Apr 2003
Hutchison Whampoa group managing director Canning Fok is being touted as the top earner in Hong Kong last year after raking in $105 million, according to the company's annual report released last night.
Hutchison reported a 60 per cent fall in net profit for last year, at $12 billion. The company's highest-paid executives suffered a 12 per cent fall in salaries, according to the report, with only Fok earning $105 million.   - 2002
   >> Frank Sixt featured on cover of CFO Asia
Executive directors Susan Chow and Frank Sixt were likely to be the second and third highest earners in the company, with respective salaries of $28 million and $27 million last year.
Fok joined Hutchison in 1984. Fok went to Britain to restructure the company's then Orange mobile phone business. He with Frank Sixt finally got Orange in the black before listing the company. His efforts in helping Germany-based Mannesmann buy Orange in 1999 made a profit of $118 billion. Following a bonus of $180 million, Fok's income that year was $200 million.
The information technology bubble in 2000 boosted salaries of people such as Pacific Century CyberWorks (PCCW) deputy chairman Francis Yuen, who earned more than $280 million. While Fok earned only $120 million that year, Yuen took away the best annual wage.
PCCW's 2001 annual report out this week revealed Yuen's salary had dropped to $26 million.
Despite the economic downturn, the number of staff working for Hutchison increased by 57 per cent to 77,000 worldwide last year. But total salary expenses, excluding directors' remuneration, only increased by 30 per cent to $10 billion.  -  2002 April 13  iMail     
Li's our idol, say bosses

Hong Kong tycoon Li Ka-shing has been voted one of the top 10 world business leaders respected and admired by senior executives on the mainland.

Bill Gates, boss of global software giant Microsoft, heads the ``list of top 10 commercial idols'' published by a Beijing-based business weekly.
Gates impresses Chinese executives as a ``workaholic''. He is the richest man in the United States with a fortune estimated at US$52.8 billion (HK$411.84 billion).
Following Gates is Jack Welch, GE's former chairman and chief executive, who is nicknamed ``Neutron Bomb'' for his lively work style and no-nonsense reform of the company. Welch cut GE's workforce almost by half, from 400,000 to 220,000, in his first 10 years.
Then comes the late Konosuke Matsushita, former chairman of Japan's Matsushita Electric Industries, whose nickname was ``Listener''.
When he died in 1989, Matsushita left an estate of more than US$1.5 billion.
Li, chairman of property developer Cheung Kong (Holdings), ranks at No 4 on the list of business idols.
Li is admired as ``A Man who Can Bear Hardships''.
In July, Li was voted the most impressive Chinese businessman in a poll of 4,236 residents in 10 cities across the mainland, including Beijing, Shanghai and Guangzhou.
The 74-year-old magnate has a fortune estimated by Forbes at US$10 billion.
He is followed by News Corp chairman Rupert Murdoch who is called an ``Adventurer''.
Andy Grove of Intel, nicknamed ``Single-Minded Man'', is in sixth place.
International financier George Soros is seen as a market ``Sniper'', and is admired on the mainland for his suspected involvement in the 1998 attack on Hong Kong's currency led by hedge funds.
At No 8 is Liu Chuanzhi of Hong Kong-listed Legend Group who is dubbed ``Smiling General''.
Designer Coco Chanel is viewed as an ``Elegant Lady'' and ranks at No 9.
Completing the list is Hugh Hefner, founder and editor-in-chief of adult magazine Playboy, who not surprisingly is called ``Playboy''.
The list was produced by Beijing-based Chinese-language weekly Business Watch, which polled about 200 senior business executives in Shanghai, Beijing and Guangzhou.
The executives ran companies with more than 300 workers and their annual salaries were about 400,000 yuan (HK$377,040) each.   - 2002 December 17 HONG KONG STANDARD      
Sizing Up Sages - Buffet v. Li
How does Li Ka-Shing, the billionaire chairman of Cheung Kong and Hutchison Whampoa, stack up against Warren Buffett? Like the Sage of Omaha, Li has become known for circling distressed companies; recently, that meant Global Crossing. It's a comparison brought up by Richard McConnell -- an investor with a Hong Kong money management company called South Ocean Partners -- in his recent newsletter to his clients.
To start, the obvious points: Buffett, through Berkshire Hathaway, gravitates to established "old economy" companies, observes McConnell. Li, through Cheung Kong, likes real estate and telecom. Both are opposed to balance-sheet debt. Buffett avoids day-to-day management responsibility; Li works closely with managers in day-to-day operations. Buffett rarely shares his investments with partners; Li has numerous partnership holdings and minority interests. And finally, Buffett has never paid a cash dividend. Li has boosted Cheung Kong's dividend every year.
Berkshire Hathaway owns a broad range of companies in varied industries, including Coca-Cola, Gillette, Wells Fargo, General Reinsurance, as well as a candymaker, a boot company and a brick producer.
Meanwhile, Li's portfolio, McConnell reports, is "largely a collection of forward-looking companies," including third-generation mobile operators, container port facilities, logistics services, genomic research outfits, Internet Websites (among other things, he bought control of Priceline), and e-commerce contracts with the Hong Kong municipal government. Li also has varied investments in China. Many of these investments are owned by Cheung Kong's 50%-owned subsidiary, Hutchison Whampoa. Cheung Kong also has Hong Kong's largest real-estate developer and "its strongest balance sheet," says McConnell. Together, Cheung Kong and Hutch account for 15% of the Hang Seng index.
So who's on first? Buffett. Berkshire has grown earnings 19% over the past decade, McConnell says, while Cheung Kong has compounded earnings at 14.3%. Berkshire stock has also returned 24% a year on average over the past decade to a recent $73,300 a share. Hutch has returned 20% a year and traded last week at HK$67; Cheung Kong gained 16% and changed hands at HK$71.
Which investor does McConnell admire more? McConnell maintains that Buffett benefited from "a head start" at the knee of value investor Ben Graham; Li got his chops on the streets of Hong Kong and went on to found the Hong Kong real estate industry. And today, says McConnell, Li "has a portfolio with technology's promise to replace his stalled real-estate holdings. None of his competitors had the foresight to do this." Moreover, he dismisses Buffett's holdings as being "in mundane industries dependent upon superior management of his selection. They are companies without technology's promise that will lose their aging managers and aging chairman soon without plans for replacement."
And although sentiment is lousy for telecom operators, Li's portfolio "will reach the world's consumer market"; Buffett's, he sniffs, is "provincial."
Says McConnell: "The question of who has produced the greatest rewards for their shareholders is a question that today might go to Buffett, but in five years no way! If you plow back your dividend from Cheung Kong into Cheung Kong stock, the race may go to K.S. Li."  -   2002 February 25          by Leslie P. Norton       BARRON'S          
DEALMAKING
Asia's Superman swoops again
Is  Li Ka-shing really the superhuman investor that Asians think he is?

In all honesty, most of Asia's tycoons, no matter how illustrious they appear at home, are really keepers of glorified mom-and-pop stores. The main exception is Li Ka-shing.  This is not because Mr Li dominates the economy of Hong Kong, where he runs most of the port (the world's biggest), has the monopoly on supplying electricity to the main island, ranks among the territory's top landlords and retailers, and owns the biggest mobile-phone operator. Rather, it is because he, alone in his region, regularly makes his powers felt all over the world, and even influences the future of whole industries.
At the moment, this is most evident in the telecoms industry. On August 9th, one of Mr Li's two main holding companies, Hutchison Whampoa, joined with a Singaporean partner to scoop up 61.5% of Global Crossing, a bankrupt American company with a global network of fibre-optic cables, for $250m. Inevitably, this invited comparisons between Asia's most famous investor and America's,Warren Buffett, who is also bottom-fishing for distressed telecoms assets.
Mr Li will make an even bigger impact this autumn, when Hutchison starts rolling out third-generation (3G) mobile-phone services in Britain, Italy, Sweden, Australia, Hong Kong, Israel and Austria.
Europe's telecoms incumbents may be delaying their 3G launches, and investors may worry that the technology might flop, but Mr Li is undaunted.
This has produced two very different reactions. The markets-ie, mostly non-Asian fund managers-are punishing Mr Li for this gamble, and have marked Hutchison shares down by over half since early 2000. On August 8th, Standard & Poor's, a credit-rating agency, said that it too was pessimistic about the outlook for Hutchison and its sister company, Cheung Kong.
Retail investors and the general population of Hong Kong, however, see it differently. In their minds, there is no question that Mr Li-whom they call Chiu Yan, or Superman-is infallible.
When Mr Li launches a company, with or without a business plan, and lists its shares, they rush to buy-as they last did in July, when the initial public offering of Mr Li's life-sciences start-up was 120 times oversubscribed. If Superman now thinks that 3G is the future, why doubt it?
The people of Hong Kong remain wowed by Mr Li because, to them, he epitomises success, a mystique he is adept at cultivating. Hong Kong is a superstitious place, and it helps that Mr Li was born in 1928, an auspicious dragon year. His key buildings are blessed with excellent feng shui. He sets his watch eight minutes early, because “eight” sounds like “prosperity” in Cantonese. He regales his visitors with stories about his cheap watches to show what a simple, ascetic man he still is. He pouts self-pitifully (“Do you not want me to invest anymore?”) every time anyone dares to suggest that he is growing too powerful-and many do, all the more so now that Mr Li has said he wants a Hong Kong television network in addition to the local radio station he already owns.
Such controversies aside, does Mr Li deserve his reputation? In part, his success can be explained by luck: he has been in the right place at the right time. From the 1980s to 1997, Hong Kong property was a one-way ticket to wealth, since the colonial government had a policy of restricting the supply of new land for building. Mr Li was among several developers who simply rose with land prices. Similarly, once he secured his niche in the containerport, he piggy-backed on Hong Kong's rise as a trading hub. In 1997, when other Asian tycoons stumbled with their currencies, Hong Kong's dollar peg kept him standing.
Luck, however, is only part of it. Alone among Hong Kong's property tycoons, Mr Li knew when to branch out overseas and into new industries. Equally rare, he always found and hired the best professional managers, many of them foreigners. Most importantly, his investment record has, so far, outperformed that of all other Asian tycoons. Everyone who has worked with him raves about his nose for opportunity.
Like Mr Buffett, he appears to look for value, but comparisons with the Sage of Omaha are overdone. Mr Buffett crunches piles of numbers in the search for undervalued companies, then holds their shares indefinitely. Mr Li, by contrast, is, on the face of it, the archetypal Asian asset-trader. He tries to time the market. He is patient but swoops with phenomenal speed when opportunities present themselves. Global Crossing is a case in point.
It has few synergies with Mr Li's other telecoms assets. Mr Li first made an offer in January, then withdrew it, and then came back with a new offer, two-thirds lower.
More than just a trader Yet even the label “asset-trader”, appropriate for most Asian tycoons, appears too small to fit Mr Li. Transactions have made him famous-his biggest coup was the perfectly timed sale in November 1999 of his stake in Orange, a British mobile-phone operator, for a profit of around $15 billion. But he also knows how to build a business. In Orange's case, he had nursed it for years before the sale. That skill, Mr Li's fans reckon, should ensure that he will be able to turn 3G into a winning proposition.
Clearly, Mr Li ought never to be underestimated. On the other hand, his record has blemishes, though few remember them. In the 1980s, he invested in a Canadian oil company that went on to underperform for years. Even in mobile telephony, his first venture in Britain, called Rabbit, flopped. Ultimately, the best way to analyse Mr Li may be to compare him with celebrity fund managers who, for whatever reasons, outperform for some time, then use their fame to play with ever bigger sums and, sooner or later, start underperforming just like everybody else."   2002 August 15      THE ECONOMIST  
Note:  In the end, Singapore Technologies took this deal on its own.
Hutchison may curb its role in Global Crossings
Hutchison Whampoa Ltd, as part of a revised bid to win US approval for its purchase of bankrupt Global Crossing Ltd, may agree to limit its role managing the company, people familiar with the matter said.
A US government committee had asked Hutchison, which is controlled by Hong Kong billionaire Li Ka-shing, and its partner, Singapore Technologies Telemedia Pte, for assurances that the acquisition of Global Crossing's fibre-optic network will not compromise national security.
Global Crossing's network transmits communications for US agencies, and the panel had concerns that China might interfere with Hutchison's management.
Under the existing plan, approved by a bankruptcy judge, the companies would have joint say over management. The parties are now discussing a plan in which Hutchison may act as silent partner, making an investment and vesting its management control in another party, people said.
'The government is in the driver's seat and can say, 'We're not going to allow you to take over this company unless you do what we tell you to do',' said Ivan Eland, a senior fellow at the Independent Institute, an Oakland, California-based policy research organisation.
Steve Lipin, a US-based spokesman for Hutchison, said the process 'is highly confidential and therefore we cannot comment. We continue to cooperate with the US government to address any concerns.'
Hutchison and ST Telemedia last year agreed to take a 61.5 per cent stake in Global Crossing after the Hamilton, Bermuda-based company emerges from Chapter 11, expected this year.
The Committee on Foreign Investments in the US, which is chaired by representatives of the US Treasury Department and includes members of the State, Commerce and Justice Departments, made the request for revisions.
The committee told the companies it needed more evidence the 27-nation fibre-optic network would remain secure if the purchase is completed, people familiar with the matter said earlier last week.
Under a change being discussed, Hutchison would cede its four seats on Global Crossing's board to independent directors, a source said. Hutchison has considered several possibilities, including the appointment of prominent US politicians or businessmen to act as its proxies on its behalf on Global Crossing's board, sources said on Friday.
Hutchison is not thought to be considering reducing the stake it would hold in Global Crossing.
'We continue to cooperate with regulatory authorities in completing the approval requirements to consummate the transaction,' Global Crossing spokeswoman Tisha Kresler said in a statement. -  2003 March 3  BLOOMBERG, NEW YORK TIMES  

Global Crossing and its creditors agreed yesterday to sell control of the company for $250 million to two Asian companies, three months after the creditors rejected a $750 million offer from the same bidders.
After many delays and months of negotiations, Global Crossing, a once-highflying international telecommunications concern, announced a deal with Hutchison Whampoa of Hong Kong and Singapore Technologies Telemedia, a unit of Singapore's state-run phone company.
Soon after Global Crossing filed for bankruptcy protection in the spring, the Hutchison group offered $750 million in cash for about 79 percent of the company, implying an overall value of about $950 million.
Confident that they could get more for control of Global Crossing, which has assets valued at more than $20 billion, the company's creditors rejected that offer.
At least two other groups, one led by Platinum Equity, a private investment firm, and another led by an investment fund backed by Bank One, submitted bids for Global Crossing. But over the summer, as other telecommunications carriers like Qwest and WorldCom imploded amid accounting scandals, the bids for Global Crossing have become smaller and smaller.
Under the terms of the deal, Hutchison and Singapore Technologies will end up with 61.5 percent of Global Crossing after the $250 million investment, implying an equity value of only about $407 million, less than half the value associated with the original bid.
Still, John Legere, Global Crossing's chief executive, declared a victory in yesterday's announcement.
"This is a textbook model for a successful strategic investment," he said in a statement. "Hutchison Telecommunications and Singapore Technologies Telemedia are highly respected telecom companies with assets and skills that complement Global Crossing's unmatched global network. With our turnaround well under way, and the support of strong new strategic partners, Global Crossing is poised to become the global leader providing networking services to enterprises and carrier customers in more than 200 of the world's top cities."
Before that can happen, however, the company must contend with about 60 shareholder lawsuits and investigations of its accounting by the Justice Department, the Securities and Exchange Commission and Congress.
A bankruptcy judge in New York gave the deal his preliminary approval yesterday, and the company and the winning bidders must develop a formal plan by the middle of next month.
During the telecommunications boom of recent years, Global Crossing amassed more than $12 billion in debt and achieved a peak market value of almost $50 billion as it built a global web of undersea communications lines. The company's founding executives, led by Gary Winnick, sold hundreds of million of dollars of stock before the company collapsed amid accounting scandals. Under yesterday's deal, the company's public shareholders will receive nothing.
After the deal is completed, the company plans to give a total of $300 million in cash to the banks that originally lent it about $2.6 billion. The banks would also receive new notes worth about $175 million and would own about 6 percent of the company.
The company's other creditors, including bondholders, are to receive 32.5 percent of the company and $25 million in notes.
"Global Crossing presents an attractive business prospect for Hutchison," Canning Fok, Hutchison's group managing director, said in a statement yesterday. "Our investment in the company, which owns substantial broadband network capacity, is in line with our vision to be a leading global telecommunications player."   -2002 August 10  NEW YORK TIMES    
Hong Kong and Singapore, 9 August 2002 - Hutchison Telecommunications Limited (Hutchison) and Singapore Technologies Telemedia Pte Ltd (ST Telemedia) today announced that they have signed an agreement with Global Crossing to invest US$250 million for 61.5 percent majority interest in the company as newly constituted. Global Crossing's creditor groups support the agreement  >>  PRESS RELEASE
NEW YORK (Reuters) - Global Crossing Ltd., in a bid to survive one of the biggest bankruptcy proceedings ever, on Friday struck a deal giving control of the once high-flying phone company to two Asian investors for just pennies on the dollar.
While Friday's deal addresses the huge financial cloud hanging over the Bermuda-based company -- operator of a fibre-optic telecommunications network connecting more than 200 cities in 27 countries -- Global Crossing still faces a morass of legal problems stemming from questionable accounting practices and possible insider trading by its chairman.
Under the deal, Hong Kong's Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte would gain 61.5 percent control of Global Crossing -- whose estimated assets top $22 billion -- in return for an immediate, $250 million cash infusion. That is far less than their original offer of $750 million for a 79 percent stake rejected by creditors as too low an offer for that big a stake.
"At this point, all we have to say is we're very happy with the people investing in the company," Global Crossing Chief Executive John Legere told Reuters on Friday after a bankruptcy court hearing on the matter.
When the company completes the bankruptcy reorganisation, the Hutchison group will pay Global Crossing's creditors $300 million in cash and issue them $200 million in new debt, a quarter of the $800 million in new debt originally offered. The creditors will then own the remaining 38.5 percent of the company, and existing shareholders would be wiped out.
The agreement includes Global Crossing's 58 percent stake in its Pacific Rim affiliate -- Asia Global Crossing Ltd. . It also includes three noncore businesses that Global Crossing had hoped to sell in the bankruptcy process, but for which it received bids considered too poor to accept.
COULD EMERGE FROM CHAPTER 11 IN EARLY 2003
The agreement, approved in principle on Friday morning by U.S. Bankruptcy Court Judge Robert Gerber in Manhattan, sets the stage for Global Crossing to emerge from bankruptcy early next year, albeit with new ownership. In January, it filed what was then the fourth-largest Chapter 11 petition on record.
In approving the agreement, Judge Gerber called the deal "the best of both worlds", given the current depressed state of the global telecommunications industry, which has witnessed the collapse of a number of one-time big players.
The latest of Global Crossing's peers to enter the bankruptcy arena is WorldCom Inc. , the No. 2 U.S. long-distance phone company, which filed the largest-ever Chapter 11 petition last month amid a mushrooming accounting scandal.
Global Crossing buckled under $12.4 billion in debt, falling prices, and a glut of high-speed network capacity -- which it couldn't sell. Like WorldCom and others in the sector, its accounting practices are under investigation by the U.S Justice Department, the Securities and Exchange Commission, and the U.S. Congress, as well as facing some 60 shareholder lawsuits.
Congressional investigators also want to talk to Global Crossing Chairman Gary Winnick about the hundreds of millions in stock sales he made just ahead of the company's collapse into bankruptcy.
Those issues remain unresolved, but CEO Legere insisted the investigations pose no threat to the Hutchison group deal.
The Global Crossing parties now must submit a formal plan to the court by September 16, following which the reorganised firm could exit the bankruptcy process in January 2003.
NEW DEAL WITH OLD PARTNERS
At the time Global Crossing filed for bankruptcy, the company had penned a preliminary deal with Hutchison and Singapore Tech to sell them nearly 80 percent of the company, for $750 million.
That deal fell apart in May because attorneys for Global Crossing's creditors said the offer was too low for a company with an estimated $22.4 billion in assets, including its coveted fibre-optic cable network.
Under the new deal with the Hutchison group, Global Crossing's bankers, which lent the company about $2.55 billion over time, would take away all $300 million of the cash being offered, as well as $175 million of the notes. In exchange, though, they would receive the smallest stake in the company -- 6 percent.
Nonbank creditors, such as bondholders, would receive just $25 million in notes but will own 32.5 percent of the company.
Joseph Ryan, an attorney for the unsecured creditors committee, said bondholders were satisfied with the new terms because it gives them a larger stake than they would have received under the Hutchison group's original offer. -  2002 August 10     REUTERS | YAHOO!     
Creditors asked to take 84pc haircut in restructure
Hutchison Whampoa and Singapore Technologies Telemedia (STT) have asked Global Crossing creditors to take a 84.2 per cent haircut on US$7 billion they lent the company.

According to a document submitted to a New York court, 21 per cent of the restructured international Internet protocol network provider would go to its creditors, while Hutchison and STT would have a combined 79 per cent. Global Crossing shareholders would get nothing in the restructuring.
The document, presented to the United States Bankruptcy Court, details the two potential white knights' debt-restructuring proposal and future business plan for Global Crossing.
On January 28, the day Global Crossing filed for Chapter 11 bankruptcy, Hutchison and STT submitted a US$750 million proposal to take it over. Under the proposal, they would each invest US$375 million cash.
Since then, at least one other company has shown interest in taking over Global Crossing assets.
Long-distance and prepaid-calling-card telecommunications company IDT Corp was reportedly talking to Global Crossing on buying assets from its subsidiary, Frontier.
Under the Hutchison/STT proposal, Global Crossing's creditors would receive US$300 million in cash and US$800 million in new debt securities, in addition to the 21 per cent stake.
All of Global Crossing's existing bank and bond debt, preferred and common shares, as well as other claims against the company, would be written off in the restructuring.
Last week, angry Global Crossing investors launched a class-action lawsuit against the company.
They are complaining that its preliminary agreements with Hutchison and STT would transfer billions of dollars of assets to them at a bargain-basement price.
According to the court document, Hutchison, STT and Global Crossing have set minimum performance targets for Global Crossing to make US$2.05 billion in service revenues and US$222 million in service earnings before interest, tax, depreciation and amortisation, in the first nine months of this year.
Creditors soon will begin talks with Global Crossing management, Hutchison and STT. The deadline for submission of rescue bids is late April, and an auction will be held in mid-May if qualified bids are submitted. The completion date of the rescue deal is expected in September.
Global Crossing is reportedly facing a US Securities and Exchange Commission investigation.   - 2002 February 7  SOUTH CHINA MORNING POST                       
Hutchison stages rescue for ailing Global Crossing
Hutchison Whampoa is stepping in to help rescue troubled United States undersea cable operator Global Crossing, which said yesterday it had filed for Chapter 11 bankruptcy protection.
The conglomerate will pay US$375 million for 37.5 per cent in the troubled company.
Hutchison will partner Singapore Government-controlled Singapore Technologies Telemedia (STT), which will take an equal stake, to secure a majority holding.
Hutchison said the transaction was conditional on confirmation of a reorganisation plan by US courts before the end of August.
The Chapter 11 declaration by Bermuda-based Global Crossing, which had been widely expected, is one of the largest such filings by a telecoms company. It said it had US$22.4 billion in liabilities and US$12.4 billion in assets.
Under the reorganisation plan, existing common equity and preferred shareholders will not get a stake in the restructured company. Global Crossing said its creditors would get a combination of cash, new debt and new equity.
Global Crossing struggled with debt incurred from building its global network, which links more than 200 major cities in 27 countries.
Trading in shares of Global Crossing were halted for the Chapter 11 announcement. The stock has fallen about 96 per cent over the past year and closed last Friday at 51 US cents.
The company said its worldwide operations would be unaffected by the filing.
Global Crossing said it and certain of its affiliates began Chapter 11 proceedings in the US Bankruptcy Court for the Southern District of New York, and co-ordinated proceedings in the Supreme Court of Bermuda.
Hutchison already has a business relationship with Global Crossing.
Affiliate Asia Global Crossing and Hutchison each own 50 per cent cent of Hutchison Global Crossing, which provides fixed-line, Internet and data services. Asia Global Crossing said yesterday it was not one of the affiliates that filed for Chapter 11 protection with Global Crossing.
Last night, Hutchison and STT said: "We are excited about the prospects of working with Global Crossing management and the opportunity presented by this transaction to develop and strengthen Global Crossing business."
It is the second time Hutchison Whampoa has stepped in to help rescue a troubled US firm. Last year, Hutchison, together with its parent, Cheung Kong (Holdings), acquired 30 per cent in online ticket auctioning business Priceline.com.
Analysts said Hutchison was doubling its Global Crossing investment in hopes of recovering some of its losses in the ailing company.
Hutchison is not the only Hong Kong company which has been buying US telecommunications assets.
Last month, Pacific Century CyberWorks bought the Asian assets of Level 3 for Reach - its joint venture with Australia's Telstra.   -  2002 January 29   by Ben Kwok    SOUTH CHINA MORNING POST      
Hutchison network at milestone
Hutchison Global Crossing has become the No 2 fixed network operator in Hong Kong, after raising its number of lines to 240,000 this month, according to chief executive Peter Wong King-fai.
The company doubled its lines this year, surpassing the 220,000 lines of competitor Wharf New T&T, a unit of the Wharf group.
The milestone was reached despite the financial difficulties afflicting one of the company's major shareholders.
Hutchison Global Crossing is a joint venture between Hutchison Whampoa and Asia Global Crossing, whose US-listed controlling shareholder Global Crossing is on the edge of bankruptcy. Reports have cited Hutchison as a potential saviour for the company, which has US$10.9 billion in debt and preferred stock.
Mr Wong said Hutchison Global Crossing was poised to reach break-even, or positive earnings before interest and tax next year. The venture no longer needed capital from the two companies after securing a HK$4.4 billion loan in September, he said.
Three-quarters of Hutchison Global Crossing's lines are operated by its own network - the highest among the non-dominant operators.
Other fixed-line operators rely heavily on inter-connection with the network of Pacific Century CyberWorks, which has been criticised for allegedly stalling their progress.
"We have spent the first six or seven years building our network. This is like a jig-saw puzzle. When we put it together, you know how much we have achieved," Mr Wong said.
Mr Wong said that by investing HK$11 billion, of which HK$6 billion was already committed, the company planned to cover half the local population in three years.
It has now provided access for more than 2,000 buildings in Hong Kong. Out of the 240,000 lines it operated about 60 per cent (144,000 lines) were for commercial use. About 40 per cent (96,000 lines) were residential. Half of these were non-Hutchison group-affiliated property projects. The company's network covers more than 40 public housing estates.
Turnover rose almost 16 per cent year on year to US$37.33 million for the three months to September.
Net loss was US$12.67 million, 18.55 per cent higher on a year-on-year basis but 7.6 per cent lower than its second-quarter loss of US$13.72 million.
For the first nine months, turnover was up 13.83 per cent year on year to US$103.57 million, while its net loss was 45 per cent higher at US$39.88 million.
Hutchison Global Crossing excluded from its results the contributions of its data centre and electronic service delivery operations, which started at the beginning of the third quarter.
Unlike other operators whose major revenue streams relied on international direct dial business, Hutchison's Global Crossing has a quarter of its revenue contributed by its IDD business, with most revenue generated from fixed-line and broadband business.
Its broadband users surpassed 400,000 in April, or about 22.2 per cent of total home passes in Hong Kong. Its broadband unit had been growing "very fast" since July, according to Mr Wong.
Top operators in Hong Kong are adding an average of 10,000 users a month.
"The broadband business is still a virgin market in Hong Kong," he said. "It will be the battlefield for operators next year."  -  SOUTH CHINA MORNING POST     
TELECOMSMaster Li picks his fruit at its ripest
Forget Warren Buffet, George Soros or Kerry Packer. Li Ka-shing is probably the world's most skilled asset trader. None have so consistently built businesses from the ground up, only to sell them at what generally proved the top of the market.Few so instinctively grasped the rhythm of market cycles. Mr Li may leave little by way of a grand legacy but he can rightly claim to have taken the "art of the deal" to new heights.
While the pace of European telecommunications deals must have surprised even him, the trading strategy was one honed in Hong Kong over 40 years.
Hutchison Whampoa's October sale of Orange to Mannesmann, that firm's later takeover by Vodafone AirTouch, the purchase of a £4.3 billion (about HK$50.54 billion) British third-generation (3G) mobile-telephone licence and now the move into a bigger telecoms grouping has left it with almost HK$200 billion in liquid assets.
Analyts are impressed and want more. Mr Li will give it to them with a planned spin-off of Husky Oil, just as oil prices hit US$30 a barrel.
This follows the opportunistic float of two-month-old Tom.com during the technology boom earlier this year, which typified the Li trading mentality. However, that was small potatoes compared to the European 3G licence bonanza.
The Netherlands' KPN Mobile and Japan's NTT DoCoMo will respectively buy 15 and 20 per cent stakes in Hutchison 3G UK Holdings for a total £2.1 billion.
This deal alone should yield Hutchison a HK$6 billion exceptional profit. It also commits Hutchison and KPN to jointly bid for a German 3G licence. If successful, KPN will inject its 77.5 per cent stake in second-generation (2G) German mobile operator E-Plus into the planned 50-50 joint venture. While the companies will run competing services, they are to share the existing core network and develop a 3G platform.
Similar arrangements are expected across Europe. In France the three new partners are expected to bid for a 3G licence.
Merrill Lynch expects Hutchison to buy out France Telecom's 50 per cent stake in the KPN-Orange joint venture.
NTT DoCoMo brings its already proven 3G expertise running the i-mode service in Japan.
Suddenly, an exposed Hutchison looks to have traded its way out of trouble. After the Orange sale it lost its core telecoms management.
The escalation in 3G licence prices meant huge capital demands, even for its deep pockets.
Now, it has solid technology partners and a shared financial burden. The competing nature of its joint ventures could yet pose problems but Mr Li has a record of making such deals work.
All this still represents an enormous leap of faith. As a newcomer to the British 3G market, Hutchison must play catch up to 2G operators who have the advantage of migrating customers to the higher bandwidth service.
It is a moot point whether consumers really want the "fat pipes" offered by 3G or will stick with simple data and e-commerce services that a souped-up 2G will offer.
In particular there are big questions about who will benefit most from the coming mobile-commerce market.
Implicit in the huge licence fee payments is the belief phone companies can extract much of the value. It is equally possible so-called virtual network operators, such as Virgin, or Internet portals like Yahoo! or eBay, will dominate.
As such, Hutchison's sale of brand-rich Orange with its advantage of incumbancy could yet prove a mistake. Yet having made his 3G bet you have to admire Mr Li's pure trading skill for getting out of a tight spot - and with a big profit to boot.  -  2000 July 14     SOUTH CHINA MORNING POST      
RETAIL
Hutchison Snaps Up 2000 Shops Across Europe for $1.2B
LONDON - Hutchison Whampoa added  700 Superdrug stores to its existing UK portfolio with the £800 million ($1.2 billion ) acquisition of Dutch retailer Kruidvat.
The Hong Kong conglomerate already owns 280 Saver health stores in the UK, which combined with Superdrug would make a near 1,000-strong estate of shops in this country. The company, as part of the Kruidvat purchase, will also be acquiring a a further 1,200 outlets on the Continent.
Superdrug, which has now changed hands twice in just over a year, is the UK's second-biggest chain of chemists after Boots.

NEWS STORIES
BRUSSELS  - The European Commission approved on Friday Hong Kong conglomerate Hutchison Whampoa Ltd's takeover of the Kruidvat Group, a privately-owned Dutch health and beauty retail chain.
The 1.3 billion euro ($1.27 billion) purchase, made through Hutchison Whampoa's subsidiary A.S. Watson, will create one of the world's largest health and beauty chains, with combined sales of more than seven billion euros.
A.S. Watson has 1,300 stores and 27,000 staff worldwide, but the bulk of its business is in Asia.
The Kruidvat purchase will build on its acquisition in 2000 of the UK-based Savers chain, which now has 280 outlets, and expand its European presence from nine to 12 countries.
Kruidvat's empire, with 1,900 outlets and 24,000 people in six European countries, includes Superdrug -- the UK's number two health and beauty chain with more than 700 stores -- and perfumery chain ICI Paris XL in the Netherlands and Belgium.
It also has a 50 percent share of 209 Rossman health and beauty shops in Poland, Hungary and the Czech Republic.
A.S. Watson's parent, Hutchison Whampoa, the ports-to-telecoms group controlled by Asia's richest businessman, Li Ka-shing, already has investments and operations in Europe, including ports, telecoms, property and water.   - 28 Sept 2002    YAHOO! ASIA  REUTERS
Asian Tycoon snaps up pharmacy giant Hutchison plans to sell its mobile phones service at Superdrug
Hutchison Whampoa, the ports to telecoms conglomerate controlled by billionaire Li Ka-shing, is to buy Dutch pharmacy giant Kruidvat.
The 1.3bn euro ($1.2bn; £830m) takeover, which will give Hutchison control over the UK's Superdrug stores, will allow the formation of one of the world's largest health and beauty chains.
  
Kruidvat profile
Owns 1,900 outlets, including 700 Superdrug stores
Has operations in six European countries
Units include:
Superdrug: UK
ICI Paris XL: Netherlands, Belgium
Rossmann: Poland, Hungary, Czech Republic
The merger of Kruidvat operations with Hutchison's existing AS Watson unit will create a business with 3,000 stores and revenues of more than 7bn euros a year.
And it will promote a Hutchison strategy of diversifying from its roots in Hong Kong.
"In view of the current difficult economic environment, it is expected that the group will focus more on opportunities in Europe, mainland China and other Asian countries in the near term," said Mr Li, reportedly Asia's richest businessman.
Competition fears
More surprisingly, the merger will see Hutchison use its European drug outlets to distribute its third generation mobile phones, the firm said.
Hutchison has stakes in mobile operators such as Vodafone and Deutsche Telekom, and was a large investor in Orange.
The prospect of increased competition in the mobile retail sector sent shares in Carphone Warehouse almost 6% lower, although the shares recovered in afternoon trade to close up 2.5% at 83 pence.
Stock in leading UK pharmacist Boots stood 2.2% lower over fears of a strengthened Superdrug, but also recovered to close flat at 574 pence.
"Suddenly there's a very credible number two player in the UK market," said Nathan Cockrell, retail analyst at Credit Suisse First Boston.
Powerful family
Hutchison Whampoa is seen as having deep pockets with which to realise its aim of expanding its retail operations in Europe.
It announced the purchase of Kruidvat as it unveiled group-wide profits of HK$5.95bn ($763m; £487m) for the first half of the year.
And, in Mr Li, it has a boss who heads one of the richest and most powerful families in Hong Kong.
As well as Hutchison Whampoa's multiple businesses, his family interests include giant property development firm Cheung Kong and Pacific Century Cyberworks, Hong Kong's biggest phone firm.
Hutchison's takeover of Kruidvat will require approval from European competition regulators. -  22 August 2002    BBC NEWS
GROCER

Park n Shop to open more $8 marts
Park n Shop, the supermarket chain owned by Hutchison Whampoa, plans to beef up revenue by expanding its single-price store business.
The 20-year-old supermarket chain denied its low-price strategy of HK$8 marts, which sells household items at a single price of HK$8, would trigger a new price war.
``The competition is always keen in the retail sector,'' said Teresa Pang, Park n Shop's public relations manager. ``Our expansion aims to satisfy growing customer demand using our huge network.''
The supermarket chain, which has 200 outlets, kicked off its single-price store business last year and now has 20 stores operating within its supermarket outlets.
The stores offer about 1,000 everyday essentials, ranging from toys and batteries to stationery and storage boxes.
Single-price stores are now the fastest growing segment in the retail industry worldwide.
In the United States, for instance, about 1,000 new ``US$1 stores'' are opening every year, while there are already more than 8,000 ``100 Yen stores'' in Japan.
In a bid to offset the slim margin on the goods it offers, Pang said the business strategy was to derive profit through large sales volume. -    2003  Janauary 1      HONG KONG STANDARD 
Li's Midas touch buoys CK Life

Li Ka-shing's magic has worked yet again with his latest stock market offering, CK Life Sciences International, attracting an overwhelming response from retail investors.

According to sources close to the sponsor, the IPO was 100 times oversubscribed.
Institutional demand for Li's biotechnology spin-off was also strong despite current subdued stock market conditions and was 10 times over-subscribed.
The response came as a surprise after analysts had been unenthusiastic about the company's prospects. Due to the large oversubscription rate, the retail portion will now be raised to 50 per cent of the total offering from the original 10 per cent under a process known as the clawback mechanism.
The institutional tranche will be slashed to 50 per cent.
The Growth Enterprise Market listing candidate aims to raise up to HK$2.61 billion to fund its business by offering 1.31 billion shares, or 20.4 per cent of its enlarged share capital, at between HK$1.80 and HK$2 each. The offer is subject to a greenshoe option of an extra 159.25 million shares.
Market sources said the informal grey market price of the stock stood at about HK$3.
The issue's sponsor Salomon Smith Barney was not available for comment.
CK Life Sciences will fix its IPO price tomorrow and will make its debut on Tuesday.
Despite the huge response to CK Life Sciences, the reception cannot be compared with the frenzy sparked two years ago when Li sold shares in his Internet and media flagship tom.com.
Tom.com's IPO, launched in February 2000, was 669 times subscribed, though the subscription rate failed to exceed the record 1,276 times achieved by red chip Beijing Enterprises (Holdings) in 1997.
After the listing, Li's stake in CK Life Sciences will fall to 29 per cent from 36.7 per cent, while the stake held by his property flagship Cheung Kong (Holdings) will drop to 44 per cent from 55 per cent.
CK Life was set up in late 1999.
Its core business includes research and development in health and environmental areas.
It offers eco-agriculture, bio-remediation, pharmaceuticals, nutraceuticals, and dermatological or skincare products.
It has developed 108 product applications and three of them have been patented.
The venture continues to be loss-making and expects to be in the red for the next several years.
It recorded a net loss of HK$22.15 million on sales of HK$134,160 in the first quarter of this year.
This compared with a net loss of HK$57.93 million on turnover of HK$148,200 in the year to December 31, 2001.
The company plans to use about one-third, or HK$850 million, of its HK$2.48 billion IPO net proceeds on research and development.     - 2002 July 10       THE STANDARD    
ENTERTAINMENT
'Superman' leaps into films, taking 17pc of  Golden Harvest

``Superman'' Li Ka-shing is about to leap into the movie-making business in a single bound by taking a 17 per cent shareholding in Asia's premier film studio, Golden Harvest Entertainment.

The deal, likely to be approved by the stock exchange this week, is estimated to be around HK$30 million. It will make Li the second-largest shareholder of Golden Harvest, a movie studio that produced early blockbusters starring Bruce Lee and Jackie Chan.
Li's purchase, revealed by The Standard on Saturday, is expected to help Golden Harvest chairman Raymond Chow fend off an onslaught from listed entertainment players eSun Holdings and Stellar MegaMedia, also known as Strategic Media International.
eSun and Stellar MegaMedia are believed to have been eyeing the 17.01 per cent stake held by Taiwan's personal computer giant, Acer Incorporated. Golden Harvest brought in Acer as a shareholder in April 2000 to pre-empt hostile takeover bids from those two companies.
``Chow has been wanting to find a friendly partner to buy the stake from Acer,'' an informed source said, adding that Chow wanted to give signals to eSun and Stellar MegaMedia that the chance to control Golden Harvest was remote.
eSun, controlled by main board-listed Lai Sun Development, made another failed attempt in June last year by sweetening the offer with its lucrative film production unit, Media Asia, in exchange for Raymond Chow's 31.28 per cent stake in Golden Harvest, market sources said.
Golden Harvest has been in talks with several other prospective investors for a stake sale since 2002 but the negotiations were called off as the price offered was not appealing.
Spokesmen for Li's Cheung Kong (Holdings) were unavailable for comment yesterday. Meanwhile, local media reported that Cheung Kong is planning to invest HK$80 million to HK$90 million in a 40 per cent stake in privately held CR Airways. The airline is controlled by Robert Yip, chairman of China Rich Holdings. Shares of China Rich, a property development and healthcare firm listed on the main board, surged 21.62 per cent, or 0.8 HK cents, to 4.5 HK cents yesterday - the biggest percentage gainer of the day. The Hang Seng Index, in contrast, shed 309.2 points yesterday.
CR Airways is held by Yip's wholly owned Plus Force Assets. It is Hong Kong's third jet passenger airline, offering charters using a 50-seat Bombardier aircraft. - 2004 May 19     HONG KONG STANDARD    
INTERNET
TOM Group
Tom Group is in talks with state-run Xinhua Bookstore and other mainland press distributors to establish a joint venture that could herald a shift in the company's media-focused mainland development strategy towards incorporating large-scale property projects.
In an interview with Hong Kong media, Tom chief executive Wang Sing said the company was courting partners with low debt levels and large property portfolios, such as Xinhua, so a joint venture could also develop property and other non-distribution businesses to supplement its core sector's low profit margins.
"Publishing and distribution has a stable and huge revenue base but low margins," Mr Wang said. "Our internet operation carries a net profit margin of 35 per cent, publishing 10 per cent and distribution just 3 per cent.
"For example, if one [of our distribution partners] has a three-storey building, we can develop it into 20 storeys while keeping the lowest three as bookstores and have shops or hotels on the upper floors."
Tom's apparent determination to pursue mainland property projects heralds a potentially significant shift in the Li Ka-shing-controlled company's business model, which has previously emphasised acquisition-led growth in the internet, media and advertising sectors.
The company, which recently migrated from the Growth Enterprise Market to the main board, is also pursuing possible investment in the commercial operations of the Beijing-based Economic Observer newspaper and has expressed interest in taking a stake inBeijing Youth Daily's planned Hong Kong listing.
The move into a sector more aligned with Mr Li's interests could also involve collaboration with the tycoon's property flagship, Cheung Kong (Holdings).
"The distribution joint venture won't be small in scale and will involve an investment of hundreds of millions or billions of dollars," Mr Wang said, adding that details were expected to be finalised by the end of the year. "We will learn from Cheung Kong and do not rule out seeking support from it."
Xinhua, the mainland's largest book distributor and retailer, is remodelling to compete more effectively in a market that will be opened to foreign and private investment in December, in accordance with China's World Trade Organisation accession agreement. It had earlier outlined plans to restructure itself into a joint-stock company and bring in a foreign strategic partner as its second-largest shareholder.
"Xinhua has a complete network with its own logistics arrangements," Mr Wang said. "If we join, we would take part in information technology and logistics development, improve financial management, combine networks as well as leverage its capital and assets."
According to the Chinese Publishing Science Academy, publishing industry revenues reached 72.7 billion yuan in 2002 - the last year for which figures are available - and generated profits of 4.9 billion yuan.          -     SOUTH CHINA MORNING POST     9 Aug 2004

Whole new ball game for Tom Online

Li Ka-shing-controlled Tom Group is serving up a new revenue stream for its shareholders ... in the high-profile world of professional tennis.

Tom has secured the 10-year rights to host the China Open and will stage its first tournament from September 10-26 in Beijing, featuring Wimbledon women's champion Maria Sharapova, Serena Williams and a host of other stars.
Tom will lease the rights to stage the tournament to its 49 per cent-owned associate China Open Ltd while Tom's wholly-owned Media Serv Asia Services will provide organisational and management services for the event.
It will receive revenue from the leasing of title rights to China Open Ltd, plus 49 per cent share of profits of China Open Ltd over the next 10 years.
China Open Ltd is 51 per cent owned by Beijing Youth Daily Group, Media Serv managing director Lincoln Venancio said yesterday.
``China Open should be close to the scale of the Australian Open, which bagged about US$50 million [HK$390 million] at the beginning of this year,'' he said.
Total prize money and player compensation will be at least US$1 million, Venancio said, adding that 60 per cent of the total revenues will come from sponsorship and advertising, and the rest from television broadcasting, ticket sales and hospitality.
Tom chief financial officer Tommei Tong said the gross profit margin for hosting the Open will be more than 10 per cent, but less than 50 per cent.
The China Open will remain in the 2008 Olympic capital for a minimum of 10 years, until at least 2013, under the leadership of its tournament chairmen, National Minister of Sport Yuan Weimin and Beijing Mayor Wang Qishan.    -    HONGKONG STANDARD   13 July 2004 
Tom Online Has Head Start
On Its Rival Portals in China


BEIJING -- Tom Online Inc. is a rising star in China's Internet sector, challenging dominant portals Sina Corp., Sohu.com Inc. and Netease.com Inc.

Tom Online has received analysts' stamp of approval for its clear focus on China's high-growth market for wireless value-added services, and it is well-placed to capture opportunities in this fast-expanding sector. And the outlook for the stock is bright, with an upside potential of as much 90% in coming months.

A boom in short messaging service, or SMS, in China had helped the three major portals overcome the burst of the Internet bubble in 2001-2002. But now, SMS growth is slowing, and portals are turning to wireless value-added services, or wireless VAS, to maintain revenue from their mobile-phone customers.

Growth Spurt

Evolution Securities China Ltd. estimates China's wireless VAS market could jump 51% this year from $634 million in 2003, with most of the growth coming from 2.5-generation services like wireless application protocol and multimedia messaging, as well as interactive-voice-response, or IVR, products. Such systems use prerecorded voice databases to present options to people, typically over the telephone. One such product is TOMusic Plus, which allows people to vote for their favorite songs on the China Music Billboard directly from their mobile phone.

Based on first-quarter figures, Tom Online derived 92% of its revenue from wireless VAS. Of the total, non-SMS services contributed nearly 40%, a proportion analysts expect to rise in coming months.
Evolution analyst Jim Sun recommends a "buy" call on the stock, with a price target of $24.60.
"A lot of companies only focus on the short-message business, but Tom Online is leading in the much faster growth sectors in 2.5G and IVR," Mr. Sun said. "That's the difference between Tom Online and China's other Internet companies."
Strong Relationship
Analysts say Tom Online ranks among the top three providers of IVR, WAP and MMS services in China. Further, it enjoys a strong relationship with both of the nation's mobile-network operators, China Mobile Communications Corp. and China United Telecommunications Corp., instead of relying heavily on just China Mobile, the bigger player.
"Though we're the latecomer to this market, the competition is really not that fierce because you know who your competitors are and what they're doing," said executive vice president Elaine Feng, formerly a senior executive at rival Sohu.
"I see Tom as a very strong player. ... Tom Online has actually worked hard and been a lot more focused than even Sina or Sohu or Netease to get to where they are," said Safa Rashtchy, senior research analyst at U.S.-based Piper Jaffray & Co.
He has an "outperform" recommendation and a 12-month target price of $18.
Dual Listing
Tom Online was spun off from TOM Group Ltd., controlled by Hong Kong businessman Li Ka-shing, and listed on both the Nasdaq Stock Market and Hong Kong's Growth Enterprise Market in March.
Tom Online stock closed at 1.23 Hong Kong dollars (16 U.S. cents) on the Hong Kong Stock Exchange Friday. On the Nasdaq Stock Market, the company's American depositary receipts rose four cents to US$12.61, down from its initial public offering price of US$15.55.
While the other portals have a finger in several pies, including online gaming and e-commerce, Tom Online's obvious focus on wireless VAS for revenue clearly sets it apart from the pack.

"We asked ourselves whether a company such as Tom, which is not an incumbent, would be better off being everything to everyone or be specialized in one area. Our bias is towards the latter," Citigroup analyst Rohit Sobti wrote in a research report. He has a $17 target price for the stock.  - by Lena Lee      WALL STREET JOURNAL    12 July 2004
A GROWING EMPIRE
Tom's ownership stakes in major media
TELEVISION
CETV:  Mandarin language television purchased from AOL Time Warner  (articles below) 
PRINT

PC Home (49%): Largest magazine publisher in Taiwan, with more than 16 titles
Cité (49%): Largest book publishing group in Taiwan
Yazhou Zhoukan (50%): Hong Kong-based, Chinese-language newsmagazine, formerly the sister publication of ASIAWEEK
OUTDOOR

Fench Star (100%): China's second-largest billboard advertising company, based in Kunming
Shanghai Maya Cultural (50%): Outdoor advertising company, owns bicycle shelter billboards in urban Shanghai
SPORTS

YC Companies
 (70%): Guangdong-based sports advertising and event-management group
ONLINE

163.net (100%): E-mail service claims to be China's answer to Hotmail with 11 million free e-mail users; just launched a fee-based enhanced e-mail service
Shawei.com (100%): A leading mainland sports portal
Shanghai Maya Online (50%): Broadband content provider; also runs eight narrowband portals
GreaTom (70%): Broadband content and services provider, joint venture with Great Wall Computer Software & Systems and Great Wall Technology
AASTOCKS.com (50%): Hong Kong-based financial website
GoChinaGo.com (55%): China travel portal and online travel agency
She.com (35%): Hong Kong-based portal for Asian women
NEWS STORIES
AOL Sells Major Stake In CETV to tom.com
AOL Time Warner  Inc. sold a 64% stake in its Mandarin-language television station, CETV Ltd. in an all-share offer valued at 53.2 million Hong Kong dollars (US$6.8 million).
Tom.com will issue 21 million shares valued at HK$2.535 each to finance the deal. The Hong Kong Internet and outdoor-advertising company also will assume funding needs for the channel up to US$30 million during the next 30 months.
The deal allows AOL to cut its exposure to what had become a costly attempt to enter China's television market. CETV posted a loss of US$17 million on revenue of US$450,000 last year, tom.com said.
Cable AudienceCETV's primary asset is the rights it was granted by Beijing to broadcast to a limited cable audience in China's southern Guangdong province. AOL had hoped that those rights, the first for a Western broadcaster, would lead to broader access to the rest of the mainland market. But the U.S. company hasn't converted that audience into meaningful revenue.
Tom.com Chief Executive Sing Wang said the two companies were "hoping to marry the best of" AOL's international expertise with tom.com's local expertise.
However, under the deal, tom.com, a four-year-old company with no experience running a television station, will assume all management, program production and advertising sales for CETV, diminishing the role of AOL, one of the world's largest media companies.
Mr. Wang said that he saw the channel's weak past performance as evidence that it still had great growth potential. He was confident that tom.com's 25-city network of ad salesmen could help carve out a bigger niche of China's fast-growing television-advertising market, valued at about $2.5 billion this year.
Though tom.com said that adding a television property to its holdings would complete its goal of being a multimedia company, the deal contains a call option that would allow AOL to buy back some or all of tom.com's stake in CETV until 2010.
Strategy CornerstoneAOL would be required to pay the higher of two options: either the fair market value or tom.com's original investment cost plus a portion of the internal rate of return generated by CETV.
Mr. Wang said that if tom.com's management is successful it still could reap a nice return, possibly turning its cash investment of US$30 million into as much as US$70 million. For AOL, that could turn out to be a costly way to win back an asset that was once considered the cornerstone of its China strategy.
The companies declined to disclose the present market valuation of CETV. However, Mr. Wang said the deal provides his company with a "very attractive entry" into China's television sector.   - By Gabriel Kahn    WALL STREET JOURNAL July 2, 2003
The agreement would cap months of effort by AOL to find a partner to help its money-losing Chinese television venture. It also would mark the first entrance into television media by Tom.com's founder, Hong Kong tycoon Li Ka-shing, whose holdings include interests in real estate, ports and telecommunications.
AOL, working through its subsidiary Turner International Asia Pacific Ltd., purchased the station in 2000. In February 2002, CETV became the first Western-owned station allowed by Beijing to broadcast directly into Chinese homes. Though the Chinese government granted CETV only a small audience in the southern province of Guangdong, AOL saw CETV as a vehicle that eventually would allow it to penetrate the enormous Chinese television market, which numbers 340 million television homes. But that market has been slow to develop for CETV, and its losses have mounted. AOL wouldn't disclose revenues or losses for CETV, but did confirm that the station has no precise timetable for when it could turn profitable.
Tom.com, an Internet, publishing and outdoor-ad concern controlled by Mr. Li, had been looking to acquire a television asset for some time. Last August it backed out of a deal to acquire a 32.75% stake in Asia Television Ltd., Hong Kong's No. 2 broadcaster, after it contended it couldn't conduct adequate due diligence on the company, a standard procedure in purchase negotiations.
Tom.com hasn't posted a profit since it was founded in October 1999, but lately its quarterly losses have been narrowing. In May, it reported an after-tax loss for the first quarter of 2003 of 42.9 million Hong Kong dollars (US$5.5 million), compared with a HK$74.9 million loss a year earlier.
It isn't immediately clear how acquiring a stake in CETV, with its small slice of the audience in the Cantonese-language-dominated Guangdong market, would complement Tom.com's business. Tom.com Chief Executive Sing Wang said in an interview last month that he was "trying to build a multimedia business" and that he sought "industry leadership" in each sector. His plan is to offer advertising to clients in a variety of media, from magazines to outdoor billboards to television.
But he conceded that CETV's small audience didn't grant him the broad access to Chinese television viewers he was looking for. "Obviously, there are properties out there with bigger reach, and if you could do a deal with those it would make our life easier," he said, noting that China's tightly regulated media market limited what Tom.com was able to acquire. The deal also represents a significant step back from the Chinese market for AOL. Stephen Marcopoto, Turner International's president, insists the company always had intended to bring in a strategic partner to CETV. "From day one we knew we'd need another piece of the puzzle," he said in an interview in June.
However, the channel's current stature seems far from the early expectations AOL had for it. When AOL relaunched CETV in February 2002, it hosted a lavish party in Beijing attended by its then-chairman, Gerald Levin, and numerous high-ranking Chinese officials. Since then it has refrained from investing heavily in original programming and has outsourced key functions such as ad sales to other companies. The sale of a controlling stake to Tom.com stands to further dilute AOL's ability to capitalize on the Chinese market.
"There is an argument that [Tom.com has] salespeople on the ground and can push [CETV] locally," says Vivek Couto, the executive director of Hong Kong-based consulting firm Media Partners Asia. "But they don't know much about broadcasting. It will be very interesting to see their channel's direction."    - By Gabriel Kahn    WALL STREET JOURNAL July 2, 2003
Tom.com to raise stake in Taiwan unit
Multi-media investment firm tom.com is considering raising its stake in its Taiwan publishing arm to 85 per cent in the next two months.

Chief executive officer Wang Sing said yesterday the company would send documents on the offer to minority shareholders of Cite Publishing Holdings for the further purchase of stake soon.
The consideration would be settled by issue of new tom.com shares, he added.
``We intend to increase the stake to more than 80 per cent, maybe up to 85 per cent,'' Wang said.
In December last year, tom.com announced it had agreed to sell the stake in Business Weekly and youth magazine Sharp Point in Taiwan to Cite, a new venture in which tom.com, as a result, holds 76.71 per cent and 241 Home Media Group shareholders have the remaining stake.
Wang said the Taiwan publishing arm's net profit margin had improved 10 per cent on a year-on-year basis, adding the company's online business had eight million Short Messaging Service registered users and 750,000 paid email users.
He said there might be some write-back of the provision made against the narrowband business assets while the broadband and online businesses would be integrated further to streamline the group's structure.
Wang also said a dispute with International Management Group had been settled.
In June 2001, International Management Group filed a lawsuit against tom.com for ceasing a sponsorship of the Chinese professional soccer league matches, and asked for compensation of US$9.2 million (HK$71.76 million).
Wang declined to disclose the terms of the settlement.
Tom.com is expected to announce its 2002 annual results early in March.
Wang said the company had a turnover of HK$1.6 billion for the year to the end of December and that it was very close to making a net profit for the September to December quarter last year.
Separately, tom.com said the company was no longer in any discussions with Thailand company GMM Grammy or its Taiwanese subsidiary 8866 Group on setting up a music joint venture on the mainland.
A spokeswoman for tom.com said the company had met executives of 8866 Group but there had been no further progress in discussions regarding future co-operation.  - By Anthony Tran      HK STANDARD          28 January 2003    
Tom to consolidate units
Multimedia investment firm tom.com plans to set up a sino-foreign equity joint venture to consolidate its 12 outdoor media subsidiaries in the mainland, sources said.

Under the new structure, minority shareholders of the subsidiaries will become shareholders of the new holding company to steer the outdoor media business, Hong Kong Economic Times reported, citing market sources.
``We expected something like this as tom.com's aggressive acquisitions really need some reorganisation to pave the way for corporate finance activities,'' one analyst said. Tom is finding it hard to get government and regulatory approvals from the Ministry of Foreign Trade and Economic Co-operation and the State Administration of Industry and Commerce to have direct holdings in the mainland outdoor media companies.
As a result, Tom has changed the original acquisition proposal, and will take control of the mainland firms by means of its nominee firm Kunming French Star Information Industry, which in turn has granted an option to tom.com to acquire all of its equity interest at any time.
Through the mainland-registered Kunming French Star, tom.com owns 60 per cent of Shandong Qilu International Outdoor Media, 60 per cent of Liaoning New Star Guangming Media Assets, 60 per cent of Shenyang Sano Global Media, 60 per cent of Siamen Bomei Advertising Lianhe, 50 per cent of Henan New Tianming Advertising and Information Chuanbo, 70 per cent of Qingdao Chunyu Advertising Chuanbo, 70 per cent of Southwest, 60 per cent of Fujian Seeout Guangming Media Advertising, 50 per cent of Beijing Yanhuang Times Advertising, and 50 per cent of Beijing Yanhuang Times Advertising.
Tom.com chief investment officer Robert Xie confirmed the company was aiming to reorganise its outdoor media business into a sino-foreign equity structure. Xie hoped the reorganisation would be completed by the end of this year. - HONG KONG STANDARD   2003 January 21
Tom.com in share swap plan to trim costs in Taiwan

Tom.com, billionaire Li Ka-shing's cross-media flagship, has agreed to swap a stake in the holding company of its Taiwanese magazines for more control in two publishers in a move to consolidate its business to trim costs.

According to the agreement, 23.29 per cent of Cite Publishing, which holds Tom's Business Weekly and youth magazine Sharp Point through Diamond Profits and Right Charm International respectively, will be sold to 241 shareholders of Home Media Group.
In return, Tom will increase its 49 per cent stake in a joint venture - HMG - with Home Media Group shareholders, to 76.71 per cent indirectly through Cite Publishing. HMG holds the entire stake of magazine PC Home and 99.97 per cent in book publisher Cite. Tom values Diamond, Right Charm and its HMG stake at a total of about HK$299,169.
``Cite Publishing Holding will serve as a common platform for further business expansion and integration by reducing paper, printing and production costs and effective sharing of back office functions,'' Tom said in an announcement.
``Cite Publishing Holding will work closely with tom's Hong Kong and mainland publishing units,'' the company said.
``Areas for co-operation and creating business synergies include know-how and experience exchange, copyright trading, operational management, distribution and advertising.''
Tom, which has shifted its focus from the Internet to traditional media business, is looking for ways to turn a profit next year after 10 quarters of net losses since its listing in 2000.
The company lost a net HK$168.6 million for the first nine months last year.
The Business WeeklySharp PointPC Home and Cite deals were tom's purchases in Taiwan last year, making it one of the largest publishers on the island. It didn't make any Taiwanese purchases this year, but has invested elsewhere, such as the purchase of a 49 per cent stake in a venture with Popular Computer Week Publishing House & China Science Media on the mainland.    -2002 December 29    HONGKONG STANDARD    

Tom to take bigger stake in outdoor ad firm

Tom Outdoor Media, a wholly owned subsidiary of tom.com, is to increase its acquisition of the equity interest of Chunyu PRC Co from 50 per cent to 70 per cent for 51.4 million yuan (HK$48.5 million).

Tom is consolidating China's outdoor media market through the acquisition of outdoor operators. The Chunyu acquisition was expected to enable Tom to meet its target to become the largest outdoor media operator in the mainland, the company said.
It said Chunyu's bundled products provided synergistic benefits across Tom's cross-media online-offline platform.
The Chunyu acquisition would position Tom for further growth through integration and organic growth. Tom Outdoor Media said increasing the size of the acquisition would give it more operational control of Chunyu.
Around 28 per cent, or 14.6 million yuan, of the consideration would be paid in cash and the remaining 36.8 million yuan would be in the form of 6.3 million consideration shares at an issue price of HK$5.51 per Tom share.
The price per consideration share represented a premium of about 176 per cent to the market price and about 173 per cent to the 10-day average price. Tom would submit an application to the listing committee of the GEM board.
To speed up the acquisition, Chunyu would not be converted to a Sino-foreign joint venture and would, instead, remain a domestic joint venture enterprise as it could take months to obtain approval from the various government departments, the company said.
Chunyu, established in the early 1990s in Qingdao, Shandong, is the city's largest outdoor media company, with outdoor media assets including unipoles and billboards.
Chunyu also has advertising and event-organising businesses.  HK STANDARD   23 December 2002  
A continuous acquisition binge leads group to splurge more than $3b to reinvent itself from Internet wannabe to regional media player   - 2002 July 15    SOUTH CHINA MORNING POST        What happened to Tom's dotcom?
The new-media upstart of Hong Kong tycoon Li Ka-shing has been quietly reinventing itself as a serious old-media player. The goal is domination of China's advertising market

Like other dotcoms, Tom.com is struggling. Since the Internet bubble burst, the Hong Kong start-up - which epitomized Asia's Net mania with its wildly popular stock-market flotation last year - has seen its share price tank and its books covered in red ink. And like many of its new-economy contemporaries, the company is scrambling to produce revenue while distancing itself from dotcom taint. Officials have even dropped the ".com" from the name. On the cover of its 2000 annual report, the company is referred to as simply "Tom."

But this is one sinking start-up that may actually manage to survive and prosper. Tom's biggest shareholder is Hong Kong dealmaker and business whiz Li Ka-shing, Asia's wealthiest man and chairman of conglomerate Hutchison Whampoa. Rather than simply write the company off as another misguided Internet play, the 73-year-old tycoon appears determined to build Tom into something really big: a diversified Chinese-language media company the likes of which Asia has never seen. Says JP Morgan Internet analyst Victor Lai: "Li Ka-shing wants to become the Rupert Murdoch of China."

Tom officials admit only to more modest aspirations, but the company is already busy acquiring old-media assets in Hong Kong, Taiwan and China (see table). Some of the purchases are cheap dotcoms that will be used to enhance the company's website. But there are also magazines, billboard companies and a sporting-events firm. The offline acquisitions appear only vaguely related, yet they have several things in common. One is solid revenues, which have largely eluded Tom's own portal business. Another is that they are established outlets for advertisers. Tom executives say they plan to make similar purchases. The aim is to transform the firm into "a total advertising solution provider" for Greater China, according to CEO Sing Wang. For Li himself, observers note, this could mean he might someday control more Chinese-language media assets than anyone.

A GROWING EMPIRE
Tom's ownership stakes in major media
PRINT 

PC Home
 (49%): Largest magazine publisher in Taiwan, with more than 16 titles
Cité
 (49%): Largest book publishing group in Taiwan
Yazhou Zhoukan
 (50%): Hong Kong-based, Chinese-language newsmagazine, formerly the sister publication of ASIAWEEK
OUTDOOR

Fench Star
 (100%): China's second-largest billboard advertising company, based in Kunming
Shanghai Maya Cultural
 (50%): Outdoor advertising company, owns bicycle shelter billboards in urban Shanghai
SPORTS 

YC Companies
 (70%): Guangdong-based sports advertising and event-management group
ONLINE

163.net
 (100%): E-mail service claims to be China's answer to Hotmail with 11 million free e-mail users; just launched a fee-based enhanced e-mail service
Shawei.com
 (100%): A leading mainland sports portal
Shanghai Maya Online
 (50%): Broadband content provider; also runs eight narrowband portals
GreaTom
 (70%): Broadband content and services provider, joint venture with Great Wall Computer Software & Systems and Great Wall Technology
AASTOCKS.com
 (50%): Hong Kong-based financial website
GoChinaGo.com
 (55%): China travel portal and online travel agency
She.com
 (35%): Hong Kong-based portal for Asian women

Whatever Li's personal goal, the man doing the heavy lifting at Tom for now is Wang, an Oxford-educated former head of China high-tech investment at Goldman Sachs. Since moving into the top job in July last year, the 37-year-old mainlander has leveraged his boss's formidable reputation and his own intimate knowledge of the country to try to position Tom as a media player. Wang's first move was to beef up Tom's Internet content, buying 163.net, a popular free e-mail service (of which he was also the chairman), and sports portal Shawei.com. In October, he moved on to offline businesses, purchasing 70% of YC Companies, a Guangdong-based sports-event organizer and marketer. This was soon followed by the acquisitions of two outdoor billboard operators: Fench Star in the southwestern city of Kunming and Shanghai Maya Cultural.

The clearest evidence of Tom's ambitions in traditional media is in print publishing. That tack first came to light in December, when the company bought a 50% stake in Hong Kong news magazine Yazhou Zhoukan (formerly ASIAWEEK's sister publication). Five months later, Tom extended its reach to Taiwan when it agreed to set up a joint venture with the island's biggest magazine and book publishers, PC Home and Cité. The deal effectively gives Tom a 49% stake in both firms. But there's more to the plan than Tom helping itself to a cut of a lucrative Taiwanese publishing empire.

The real target is China. The new partners aim to take the technology and business titles of PC Home and Cité to the mainland. They will also look for takeover targets among established mainland publications, including newspapers. One market rumor - which Tom doesn't deny - is that Li's people are already negotiating to buy San Lian Shenghuo, a popular Beijing biweekly newsmagazine. Although fragmented and underdeveloped today, China's advertising market - including print, billboards, broadcast and Internet - is about $10 billion annually. Wang estimates the country's total ad spending will reach $12 billion in three years.

Tom's strategy is not mere empire-building. It's a matter of survival. Company executives admit their smorgasbord expansion beyond the initial portal business was necessary to generate revenues that could assure the business's long-term viability. Jimmy Lai, head of Hong Kong's Next Media group and a one-time rival of Li's in the grocery business, says Tom is doing the right thing by retooling what he calls its "shattered Internet vision." Tom's leadership quickly realized one way of doing that was to put together a diverse lineup of online and offline media outlets that could offer advertisers something no one else provides in China today: a cross-selling opportunity.

Take a Western sneaker maker that wants to target Chinese urban teenagers who surf the Net for hours, bike to school and watch live basketball games on TV. Tom can help its client reach them all through its portal, billboards and courtside ad placements. "We're basically tackling the largest ad block outside of broadcasting," says Wang. "In China, to develop a total marketing strategy is difficult to execute. But we're integrating the first of these [channels]." He sums up the approach as "grand vision, baby steps."

So far Wang hasn't tripped on his shoelaces. "He is trying to diminish the image of Tom as a portal," says Wallace Cheung of DBS Securities in Hong Kong. "He has done a great job at least to make sure that revenues from traditional media are more than those from new media." In the first quarter of this year, revenue rose 10% from the previous quarter to $9.9 million, with $7.2 million of that generated by offline assets. Meanwhile, Tom's quarter-on-quarter operational loss fell from $8.9 million to $7.1 million (the company lost $49 million in 2000).

Wang says costs are now under control, thanks to swift action. One of the first things he did after becoming CEO was to lay off 80 of the 500 employees the company had at the time. Tom's "burn rate" is about $3.5 million a month and falling, he says. The company's cash position stands at just below $100 million, down from the $174 million it raised through two share issuances. Wang is confident profits will come. He recently signed up some 120 new advertisers, and cross-selling to them accounted for about 10% of Tom's first-quarter advertising revenue. DBS Securities analyst Cheung says Tom could break even by 2003. "I'm not less stressed," Wang says, "but am more confident now."

With substantial stock options, Wang stands to reap big rewards himself if Tom succeeds. He has the right to exercise his 30 million share grants at 68 cents. Tom's stock currently trades at less than half that level. Until Wang delivers profits, the price isn't likely to rise much. Besides being a bummer for option-holders, depressed shares act as a drag on the company's acquisition strategy because buyout targets won't accept cheap stock as currency - sellers want cash.

There are plenty of other obstacles to China purchases, as well. Beijing bans foreign ownership of publishers and broadcasters. It's unclear how the government, which rigidly controls and censors the media, would view takeover bids even from someone with the considerable connections of Li. Tom officials admit they have no expertise as publishers, nor any interest in content outside of the advertising it attracts. "In most cases we might not go for controlling stakes," Wang says, thus adhering to the letter of the law.

Tom's work-in-progress status and uncertain prospects may be why Li has so far stayed in the background. He has not said anything publicly in support of Wang's new direction, nor have Li's associates officially declared Tom the media branch of his business empire, which includes retailing, ports, telecommunications and property. In Tom's annual report, there's only a name card-sized picture of Li shaking hands with a business partner. Wang nevertheless says Li plays a central role, adding that he devotes "disproportionate time and attention" to following the company's progress.

Others agree Li's influence - even if behind the scenes - is key. "Li is one of the few people who have the power and ability to turn that [media] dream into reality," says Liana Yung, an Internet analyst at ABN AMRO Asia in Hong Kong. "No one is doing what Tom is doing. It has no competitors for now." Next Media founder Lai doesn't think Li wants to be China's Murdoch - yet. But he agrees that "with the clout he carries, anything Li does in a big way will pose serious competition to people in the business."

Time may be on Tom's side. Unlike most dotcoms, the company has enough cash on hand, combined now with revenue from its old-media assets, to pursue its plan for the next couple of years. In the meantime, China is soon expected to join the World Trade Organization and may relax its media regulations, making life easier for foreign companies like Tom. It sure looks as if Li Ka-shing, arguably Hong Kong's most astute businessman, is fast turning a new-economy disaster into his next major opportunity. 
 - 2001 July 13   ASIA WEEK
MEDIA
Toms Fuzzy Vision
Everyone knows now is not the time to create a media conglomerate, but a loss-making Hong Kong start-up has a fuzzy notion of doing just that. How can Tom Group succeed where global giants have failed? Do not adjust your set: The picture really is unclear
THERE WAS A DEFINITE sense of deja vu in Hong Kong earlier this month. A dotcom start-up made an ambitious acquisition of a venerable media conglomerate. Tom Group, which listed as tom.com just two years ago, announced it would buy a 32% stake in Hong Kongs No.2 broadcaster, Asia Television.
But there was none of the market excitement which met AOLs audacious merger with Time Warner in 2001. This deal elicited yawns and ambivalence. Investors sent Toms stock up 3.8% the day after the merger and down more than 6% the following week.
Toms acquisition comes as the worlds media giants are crashing and burning. Vivendis visionary chief executive, Jean-Marie Messier, was forced out last month after recording the worst-ever loss in French history and AOL Time Warners stock has lost more than half its value this year. "Look at AOL, Viacom, Vivendi," says Kristian Jhamb, a media analyst at JPMorgan Chase in Hong Kong. "They have been the poster boys of convergence and none of these global players have been able to make it work to the extent originally envisaged." Many of these multi-billion-dollar media empires are likely to dismantle, as the sum of their business units is greater than the value that the market has given the whole.
But Hong Kong investors havent yet woken up to the pitfalls of Toms multi-media business model. Theyre lulled by a blind faith in Toms founder, Hong Kong billionaire Li Ka-shing, nicknamed Superman for his ability to spot money-making opportunities. The company, which renamed itself Tom Group to distance itself from its dotcom roots, has continued ploughing money into acquisitions, despite writing off HK$1.1 billion ($141 million) in losses last year.
Toms chief executive, Sing Wang, has bought what amounts to one company for every month he has been in office, completing more than 25 deals and a handful of joint ventures and special partnerships. The cost: HK$3 billion. The company will spend another HK$361 million--its biggest single purchase--on ATV, a second-rate, loss-making TV station.
Wangs aim is to transform Tom into an AOL Time Warner-like media conglomerate in Greater China. But surely, if a global giant like AOL Time Warner cant make money from multi-media in the United States--the worlds biggest advertising market--it will be virtually impossible for little Tom to pull it off in an ill-defined market like Greater China. Despite repeated requests, Tom refused to comment for this story.
Of course, if any market needs consolidation, its Chinas, and if anyone can turn a profit, its Li, who has proven his sceptics wrong many times. The mainlands massive media industry is extremely fragmented with the thousands of publishers and broadcasters controlled piecemeal by local, regional and state government offices. With his guanxi, or influence, and deep pockets, Li could consolidate a chunk of the industry and turn the tables on his critics just as he did with Orange, the British mobile operator he sold at a princely profit.
TOMS HANDS ARE TIED
But it wont be so easy to find willing buyers for Toms assets. "Who would be the buyer?" asks Jhamb. "The universe of prospective China media investors is very limited. And the key gems in a media empire are a mainland print vehicle and a broadcaster--Tom doesnt have that. No one does."
And Tom wont be able to get its hands on an attractive print or broadcast vehicle in China any time soon. With media under tight government control, foreign players like Tom have limited access to the market. Even with its connections, it hasnt been able to make any major inroads into the mainland and has been relegated to buying less-lucrative items like billboards, bus shelters and sports-marketing firms. Its only mass-media deals so far have been in Taiwan, where it snapped up 42 titles that make up 40% of the magazine market, and the ATV purchase in Hong Kong.
Wang has succeeded in transforming Tom from a dotcom into a sprawling media conglomerate with Chinas largest outdoor-advertising network and Taiwans largest magazine empire. But the company remains unprofitable and integration of its new acquisitions is essential to earning healthy returns. At the moment, all its assets--ranging from advertising agencies to a billboard network, a VCD manufacturer and magazines--are run separately, held together only by financial controls.
And none of Toms purchases are worth much individually--they are mostly small players in niche markets. Tom will only be able to increase the value of these companies if it can sell space in bulk to advertisers across its many properties and increase revenues by repackaging its content for all of its other channels.
Media specialists at global giants like AOL Time Warner and Viacom have struggled to make the business model pay. It will be tougher still for Toms management team, who are better known as shrewd deal makers than hands-on operations experts. Wang, for instance, was a private-equity investor at Goldman Sachs before joining the company. "Tom now has a lot of assets, they've built a media franchise," says Vivek Couto, an analyst at Hong Kong-based consultancy Media Partners Asia. "But I'm slightly skeptical about whether they can integrate it all. You've got to have people enshrined in the media business to do that and theres' no one at Tom with that kind of expertise."
For an idea of the difficulties Tom faces in integrating its acquisitions, look at its outdoor-advertising business, considered the gem in its portfolio. In the past year and a half, Tom has cobbled together Chinas largest outdoor network by buying 12 companies with a presence in 22 cities. It controls 5% of the outdoor-ad market in China and reaped HK$130 million in pre-tax profits last year. Chinas outdoor-ad market will grow from $665 million in 2001 to $1 billion in 2004, according to London-based media-buyer Zenith Optimedia.
But unlike its biggest competitor, Clear Media, Tom has failed to combine its new purchases into a market-leading package for advertisers. And while its been distracted by other acquisitions, like ATV, Clear Media looks set to overtake it as the largest outdoor network in China through a merger with a smaller player, MediaNation.
If Tom is having trouble integrating the properties in its outdoor division, how will it combine the offerings of nine different businesses? "There is no convergence between outdoor advertising and DVD factories--zip," says James Mitchell, a media analyst at Goldman Sachs in Hong Kong. Little wonder that cross-media ad sales--the linchpin for Toms growth ambitions--accounted for just 4% of its sales in the last quarter.
To make matters worse, Toms assets are not must-have space for advertisers. Over 80% of total ad spend in China goes to television or publications, like newspapers and magazines, according to Zenith. Tom owns neither on the mainland, so the ATV acquisition could plug the gap by providing a platform for future entry. But the broadcaster isnt nearly popular enough to anchor a Tom advertising package, which could include on-line, billboard and magazine ads.
Toms magazine titles in Taiwan, like Business Weekly and PC Home, are more attractive to advertisers, but it will be difficult to package this publishing portfolio with TV time in Hong Kong and billboards in China. "Its sometimes hard to get clients to separate their budgets--a TV deal over here, an outdoor deal over there," says Blaise d'Sylva, chief executive at Starcom MediaVest Group in North Asia. "Plans arent all done together, especially [across] different markets like Taiwan, China and Hong Kong."
So far, theres no sign that Tom has a clear vision of how to make all of its many pieces fit together.    -  2002 July 25    FAR EAST ECONOMIC REVIEW   
INITIAL BACKGROUND on TOM.com
  • Cheung Kong owns 19 per cent of Tom.com while Hutchison Whampoa is the largest shareholder with 38 per cent. Pacific Century CyberWorks owns 5 per cent.
  • Tom.com  formed a partnership with China Travel Network (CTN) to establish itravel, a mainland travel information and bookings agency site.  Tom.com holds 55 per cent while CTN will hold the remainder. 
  • Tom.com launched in February 2000 and was 1,250 times oversubscribed.  Institutions were allocated 90 per cent of shares and the remainder went to local investors.     BNP Paribas Peregrine was Tom.com's global sponsor, HSBC Investment Bank lead underwriter, BOCI, Warburg and Goldman Sachs underwriting managers while CLSA, China Everbright, CASH, CEF, Tai Fook, Worldsec and Dao Heng Bank were underwriters
  • Hundreds of thousands of people queued outside banks hoping to cash in on the Internet mania generated by the offer of shares in Li Ka-shing's Tom.com venture.  About 1.5 million applications to buy shares in the company were received, many handed in during chaotic scenes at 10 designated HSBC branches ahead of the noon deadline.   At one point in Mongkok, a queue of 50,000 snaked along Argyle Street, Shanghai Street, Waterloo Road and Portland Street.  In North Point, where 20,000 people submitted forms, part of King's Road was closed. In Tsuen Wan, an estimated 120,000 people submitted applications while 40,000 converged on Kwun Tong and 20,000 on HSBC's Central headquarters.
  • Much of the interest in Tom.com was generated by the fact that it is 57 per cent-owned by Cheung Kong (Holdings) and Hutchison Whampoa, which are chaired by Li Ka-Shing.
  • Tom.com's US$2bn market capitalisation allows it to make acquisitions  
  • A reorganization of the company took place in July 2000 with Sing Wang taking over at the helm as chief executive.  The bulk of the employees are now based in Beijing.
  • Tom.com corporate site
ACQUISTIONS  | Selected Press Clippings
Portal-operator Tom.com is set to acquire stakes in a sports portal and an advertising and event management firm for US$50 million, as part of its efforts to build a sustainable revenue base.
The firm yesterday said it has signed memoranda of understanding to buy all existing shares of Shawei, the operator of sports Web site Shawei.com for US$20 million, and 70 per cent of YC Press for US$30 million.
YC Press is a mainland sports advertising and event management firm owned by newspaper publisher Guangdong Yang Cheng Evening Post Group.
Tom.com's new chief executive Sing Wang said the acquisitions are expected to contribute annual revenues of HK$230 million. He did not provide further details.
"This important move is in line with Tom.com's focus of strategically building our portfolio and leadership in the booming China Internet market," Mr Wang said.
Tom.com, controlled by Cheung Kong (Holdings) and Hutchison Whampoa, reported a net loss of HK$194 million on turnover of HK$5.27 million in the six months to June 30.
Pacific Challenge Securities research director Ricky Tam Siu-hing said the acquisitions were positive news.
"Many fund managers have been criticising Tom.com for not doing much after its listing."
Mr Tam said Tom.com's latest move has also added to a trend among Internet firms to acquire or become involved in old-economy businesses in an attempt to secure a more stable revenue base and make their business models look more sustainable.
Financial markets news portal E-finet.com has launched a newspaper to close the gap on becoming a multimedia firm, while Internet ventures investor Pacific Century CyberWorks has acquired traditional telecommunications operator Cable & Wireless HKT to give it a stable cashflow.
Mr Wang did not respond to media queries on the valuation basis, revenues and profit records of YC Press and Shawei. He said the deals would be finalised within the next few weeks.
When asked how Tom.com had been able to circumvent Beijing's restrictions on foreign stake acquisitions in mainland media-related operations, a YC Press spokesman said the agreement was conceived after careful study and consultation and therefore should fulfil any regulatory requirements.
Despite having its operations in the mainland, YC Press was Hong Kong-registered, the spokesman added.
Mr Wang said Tom.com had not finalised payment terms for the acquisitions, which could be a mixture of cash and new shares.
The firm is prohibited from issuing new shares before September 1, the expiry date of its six-month moratorium on the issue of new shares.
With cash of between HK$700 million and HK$800 million, Tom.com is also in talks to acquire Guangzhou-based Web site and Internet service provider 163.net. The deal is estimated to be worth up to HK$500 million.   - 2000  August 14    SOUTH CHINA MORNING POST
TOM.COM, the Internet portal controlled by tycoon Li Ka-shing, continued its rapid expansion into the mainland's outdoor media business yesterday with the announcement of a 67.3 million yuan ($63.89 million) acquisition of New Star Prosperity Advertising Company, the largest outdoor media advertiser in Dalian.
The company said in a statement it had agreed to purchase a 60 per cent stake in New Star Prosperity in what was its third purchase in the past two months.
Tom.com paid 129.85 million yuan for the other two advertisers.
Under the deal, Tom.com will pay 19.2 million yuan or 28 per cent in cash and settle the remaining 48.53 million yuan by issuing 8.31 million new shares at $5.51 each. Tom.com's acquisition agreement included a profit guarantee from New Star that its 2001 after-tax profit will not be less 8 million yuan.
Should the 2001 earnings of the advertiser fall short by more than 5 per cent, Tom.com would be able to adjust its acquisition price proportionately.
New Star posted an after-tax profit of 3.1 million yuan in the first six months in 2001.
Its core outdoor media assets are unipoles, giant billboards and light boxes, with a total advertising space of more than 8,000 square metres.
With this acquisition, Tom.com will have eight outdoor media companies nationwide.
Its network covers 22 cities, including Beijing, Shanghai, Liaoning and Guangdong. Its total advertising space in China will be over 134,300 square metres.
Sing Wang, chief executive of Tom.com, said more outdoor media acquisitions were likely as the company moved to secure a dominant position in the sector.
``We'll be aggressively identifying profitable companies with quality assets in key mainland cities to expand the nationwide platform further,'' Wang said in a statement.
In February, Tom.com agreed to pay $74 million for a 60 per cent stake in Chinese outdoor advertising company Qilu PRC Co, a further step in its ambitious plan to become the largest outdoor media company in the mainland.
In late January, it paid 51.4 million yuan for a 50 per cent interest in another mainland outdoor advertiser Chunyu PRC Co. Shares of Tom.com closed unchanged at $3.75  - 2002 March 1   i Mail 
INITIAL PRESS RELEASE
Hutchison Whampoa and Cheung Kong form mega portal venture:  TOM.COM
  • Targeted at both PRC and Global audiences to “Bring World to China"
  • Multi-lingual portal and portfolio of China-related content
  • Exclusive arrangements with key People's Republic of China content partners.  

Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited today announced that they will be bringing together their existing and planned internet 'infotainment' content activities under a new holding company
The holding company, Tom.com  will include strategic investors with broad access to key Mainland content providers, and will launch a mega portal of China-related content, Tom.com, in January 2000.
Initially, Hutchison Whampoa and Cheung Kong will respectively own 40% and 20% of Tom.com Limited with the strategic investors holding the remaining 40% amongst them. Additional strategic investors are expected to join over the coming months.  
The new venture has already signed agreements with China Travel Network Co Ltd, Chinese Historical Antiquities Exchange Association, China National Publications Import and Export Corporation,  Guangzhou Online Information industry, The Chinese Academy of Science, Cyber Catalyst Net Co Ltd, Beijing Oriental Spider Advertising Co and Beijing Xin Chao Yue Advertising Co Ltd.  All of whom will provide content to Tom.com .  Many more leading content partners are expected to join the mega portal over the coming months.  
“Internet related development is the world’s fastest growing business, especially in China. With its easy-to-access service and content-rich mega vertical portal, we are confident thattom.com  will soon become the preferred provider of China-related on-line content, for the global audience and also the local audience in the PRC,” said a Hutchison Whampoa spokesperson.  “By leveraging Cheung Kong and Hutchison’s solid financial background, experienced management team and vast knowledge in telecommunications, together with our strategic investors’ extensive access to key  China content providers, the joint venture is well positioned to offer the best portal and e-commerce services and content for its audience and to capitalise on the huge potential emerging from the fast expanding internet world.”    - released 1999
Editor's note :     Tom.com currently achieves ~ 2.5 million page hits per day, primarily from within China.   We advised the Chair of  Tom Group during the initial Start-up in 1999.
 ATV
Note:  The proposed acquisition of ATV did not conclude.  Vendor's inability to deliver meaningful due diligence materials was cited as issue for breakdown in the negotiations.
HONGKONG - Tom.com, a media firm controlled by tycoon Li Ka Shing, yesterday confirmed reports that it was buying a 32.7-per-cent stake in Asia Television (ATV), one of two free-to-air broadcasters in Hongkong.
The company said it has entered into a memorandum of understanding with Lai Sun Development to acquire the latter's stake in ATV.
It will pay about HK$290 million (S$65.8 million) in new shares to Lai Sun, a property developer controlled by the family of businessman Lim Por Yen.
Tom.com will also buy a 50-per-cent stake in ATV website HKATV.Com from eSun Holdings, Lai Sun's Internet unit, for 12.8 million new shares at HK$5.51 each.
The completion of the acquisition is subject to approvals from the relevant regulatory bodies in Hongkong, including the Broadcasting Authority, Tom.com said in a statement.
The deal would make Tom.com the second-largest shareholder of the broadcaster after China-born Liu Changle - chairman of Phoenix Satellite Television and now a citizen of Belize. --AFP
Majority stake in ATV not ruled out, says Li
Cheung Kong (Holdings) and Hutchison Whampoa chairman Li Ka-shing will not rule out buying more of Asia Television (ATV) to become a majority shareholder.

Li's multi-media company, tom.com, announced on Tuesday it had agreed to buy a 32.75 per cent stake in ATV for HK$290 million, making it the second-largest shareholder after Vital Media Holdings, controlled by Liu Changle.
``All I can say is that we can't rule out such a possibility (becoming a majority shareholder),'' Li told reporters after Cheung Kong's extraordinary general meeting yesterday. ``ATV and tom.com's existing media business, such as printed publications, complement each other very well.''
But ATV chief executive Chan Wing-kee, a major shareholder, told Cable TV that he did not plan to sell his shares yet and neither tom.com nor Hutchison had contacted him.
The proposed purchase of a stake in ATV reflects another step in Li's aggressive expansion into the media industry. Cheung Kong and Hutchison are 50-50 shareholders of radio station Metro Broadcast, while their subsidiary tom.com has acquired several magazines and media advertising companies in greater China in the two years since it was listed.
Li said he had no immediate plans to buy a local newspaper, but he would never say ``never'' about the future.
He said television was not a new business for Hutchison, as it had held a 25 per cent stake in Television Broadcasts (TVB) before Sir Run Run Shaw gained control of the company. Li added that there was no plan to spin off ATV for a separate listing. ATV scrapped a share sale last year due to poor performance of media stocks.
To complete the transaction, tom.com may need to get approval from the Broadcasting Authority, the Executive Council and Chief Executive Tung Chee-hwa under cross-media ownership laws. Li's flagships Cheung Kong and Hutchison, which control tom.com also own half each of Metro Broadcast Corporation.
But Secretary for Commerce, Industry and Technology Henry Tang said yesterday the Executive Council had not yet been informed about the proposed deal.
Tom.com has agreed to issue about 87.2 million shares at HK$3.33 each to finance the purchase of ATV from Lai Sun Development.
It will also sell 12.8 million shares at HK$5.51 each to buy half of the ATV website, HKATV.com from Lai Sun's Internet arm, eSun Holdings.
Boosted by the proposed deal, shares of tom.com jumped HK$0.125 or 3.76 per cent to close at HK$3.45 yesterday.
Meanwhile the Stock Exchange has asked Lai Sun why it did not ask for its shares to be suspended from opening of business on Tuesday, after the Apple Daily reported it was in talks with tom.com for the ATV sale.
Shares in the company soared 31.3 per cent before they were suspended at mid-morning.
Tom.com shares were suspended from the opening.
Lai Sun ``should have considered requesting the Stock Exchange to suspend trading of its securities to avoid speculative price movements pending the formal announcement,'' the exchange said.      - 2002 July 11   THE STANDARD   
Tom.com moves to buy stake in ATV and website

Li Ka-shing's cross-media firm tom.com plans to buy a 32.75 per cent stake in Asia Television (ATV) and a 50 per cent stake in its website HKATV.com in a deal worth about HK$360.9 million.

The company announced the move late last night after a day of speculation during which its shares and those of ATV shareholder Lai Sun Development were suspended.
Tom.com said it had entered into a memorandum of understanding with Lai Sun to acquire its interest in ATV by issuing about 87.2 million shares at HK$3.33 per share, or HK$290.376 million. Under a separate understanding, tom.com will issue about 12.8 million new tom.com shares at HK$5.51 per share - a 65 per cent premium on yesterday's closing price - to buy the interest in HKATV.com from eSun Holdings. ESun is 50.79 per cent-owned by Lai Sun honorary chairman Lim Por-yen. Its shares were also suspended yesterday.
The ATV buy appears to require dispensation under cross-media ownership laws as Li's flagships, Cheung Kong Holdings and Hutchison Whampoa, which control tom.com, also own half each of Metro Broadcast Corporation. This prohibits them from owning more than 15 per cent of another free-to-air broadcaster.
Tom.com said the acquisition was subject to a number of conditions.
These included approval from regulatory authorities ``including but not limited to the Broadcasting Authority'' and shareholders.
If the deal goes through, tom.com will become second-largest shareholder in ATV, behind Vital Media Holdings - controlled by Liu Changle, chairman of Mandarin-language broadcaster Phoenix Satellite TV - which bought 46 per cent last month.
Before trading in shares of Lai Sun Development was suspended yesterday morning, the stock surged 31.3 per cent to HK$0.151, following a newspaper report that tom.com was involved in talks to buy the stake for up to HK$1.1 billion.
Lai Sun honorary chairman Lim Por-yen said he had been informed of the talks by executive director Mark Lee but had been unable to reach his son, chairman Peter Lam, to find out more details. Lim said Lai Sun's investment in ATV had been a ``failure'' and was ``outrageous''. He said his son ``is the person to decide'' whether to sell the stake. ``I am not in on it,'' Lim said. ``Bygones are bygones, and I have lost more than HK$1 billion on it already.''
Jonathan Iu, an analyst at SG Securities said it was difficult to understand why tom.com was making a play for Asia Television.
``.. I can't really see any synergies at the moment,'' Iu said. ``The Hong Kong free-TV market is a mature market, dominated by TVB.''
Tom.com operates a publishing business in Taiwan and outdoor advertising business on the mainland.
``I thought their main strategy was fixed to China and Taiwan,'' said Iu.
Tom.com, which was an Internet portal at its initial public offering in March 2000, has shifted to conventional media business lately.
``The advertising environment in Hong Kong is not too good at the moment,'' said Iu. ``Tom doesn't really have any expertise in running a TV company.''    -    2002 July 10    THE STANDARD    
VODAFONE - MANNESMANMidas touch in Li firm's US move

The man with the mobile Midas touch, Li Ka-shing, looks set to book another multi-billion profit as his Hutchison Whampoa Group tidies up its foray into the US mobile-telephone market.
Fresh from a HK$50 billion profit due from the sale of its 10 per cent stake in Mannesmann to Vodafone AirTouch, Hutchison Whampoa announced two developments at the weekend concerning its United States mobile venture with VoiceStream Wireless Corp (VWC).
First off, VWC has completed a merger with a former rival in the GSM mobile-phone market in the US, Omnipoint.
Hutchison spent US$1 billion in June to buy a 30 per cent stake in VWC.
It subsequently injected a further US$957 million into the company to support its merger with Omnipoint.
Secondly, it announced, the enlarged VWC was in the process of wrapping up a merger with another former rival, Aerial Communications, expected to be completed in April.
On completion of the Aerial merger, it is expected that VoiceStream will have a total market capitalisation of US$35 billion, said Hutchison.
Its stake on a fully-diluted basis would amount to 23 per cent - or about US$8 billion - after the exercise of certain conversion rights.
At a little under US$2 billion before the exercise of those rights, Hutchison Whampoa will have built a stake projected to be worth about US$8 billion in a mobile-telecom operator that will make it one of the largest licensees in the world using GSM technology.
The merged entity will be the largest GSM wireless telecommunication network operator in the US, covering a population of about 210 million in 23 of the 25 largest markets.
A Hutchison spokesman said: "The Omnipoint merger represents another milestone in the global expansion of Hutchison's telecommunication business."
Shares in VWC have soared from a 52-week low of US$16.375 ahead of Hutchison's initial investment in the company, to their present level of about US$140.
Shares in Aerial Corp have, meanwhile, risen by about tenfold, from US$6 to Friday's closing price of US$63.
The man with the mobile Midas touch, Li Ka-shing, looks set to book another multi-billion profit as his Hutchison Whampoa Group tidies up its foray into the US mobile-telephone market.Fresh from a HK$50 billion profit due from the sale of its 10 per cent stake in Mannesmann to Vodafone AirTouch, Hutchison Whampoa announced two developments at the weekend concerning its United States mobile venture with VoiceStream Wireless Corp (VWC).
First off, VWC has completed a merger with a former rival in the GSM mobile-phone market in the US, Omnipoint.
Hutchison spent US$1 billion in June to buy a 30 per cent stake in VWC.
It subsequently injected a further US$957 million into the company to support its merger with Omnipoint.
Secondly, it announced, the enlarged VWC was in the process of wrapping up a merger with another former rival, Aerial Communications, expected to be completed in April.
On completion of the Aerial merger, it is expected that VoiceStream will have a total market capitalisation of US$35 billion, said Hutchison.
Its stake on a fully-diluted basis would amount to 23 per cent - or about US$8 billion - after the exercise of certain conversion rights.
At a little under US$2 billion before the exercise of those rights, Hutchison Whampoa will have built a stake projected to be worth about US$8 billion in a mobile-telecom operator that will make it one of the largest licensees in the world using GSM technology.
The merged entity will be the largest GSM wireless telecommunication network operator in the US, covering a population of about 210 million in 23 of the 25 largest markets.
A Hutchison spokesman said: "The Omnipoint merger represents another milestone in the global expansion of Hutchison's telecommunication business."
Shares in VWC have soared from a 52-week low of US$16.375 ahead of Hutchison's initial investment in the company, to their present level of about US$140.
Shares in Aerial Corp have, meanwhile, risen by about tenfold, from US$6 to Friday's closing price of US$63.  - Louis Beckerling   SOUTH CHINA MORNING POST    28 Feb 2000
Hutchison disposal nets 5pc of Vodafone



Hutchison Whampoa confirmed it intends to sell its 10.1 per cent holding in German group Mannesmann to Vodafone AirTouch, the world's largest mobile-phone operator.
Its decision comes after Vodafone last week finally won a recommendation from the Mannesmann board that shareholders should accept Vodafone's 173.24 billion euro (about HK$1.32 trillion) takeover offer.
It means Hutchison will now become the single largest shareholder in Vodafone, with 5.05 per cent, although the company yesterday would not say whether it would remain a long-term investor.
Hutchison was initially reluctant to back Vodafone's bid, pledging to maintain its entire holding in Mannesmann for a minimum 18 months - going further than even its original contractual obligations.
However, it did say it would back a takeover of Mannesmann if it was recommended by the Mannesmann board.
"I think we will be consistent with the position we have taken all along," said Hutchison finance director Frank Sixt.
"Because it has been recommended by the Mannesmann board, we will be tendering our shares into the offer."
Mr Sixt said it was too early to say whether Hutchison would remain a long-term shareholder.
"We need to formulate our own ideas first," he said.
The value of Hutchison's stake is about 17.3 billion euros, although the company may be tempted to hold its stake in Vodafone, which has outlined an ambitious strategy to harness mobile technology as an Internet tool.
Vodafone yesterday credited Hutchison with being "incredibly instrumental to the deal".
"They played an important part in gaining a recommendation from the Mannesmann board," a Vodafone official said.
Vodafone chief executive Chris Gent has said he is keen to expand in Asia, where the firm's operations are much smaller than in Europe or the United States, and analysts believe Hutchison could be a useful partner in the region.
Goldman Sachs analyst Mike Warren said Hutchison management had indicated it may re-enter the European cellular market by bidding in coming auctions for third-generation licences.
This could involve a strategic alliance with NTT DoCoMo, with whom Hutchison already has links with its Hong Kong cellular-phone operations, Mr Warren said, in a note to clients.
NTT DoCoMo, which is reportedly considering a US$35 billion bid for Orange, has confirmed it wants alliances with European telecoms operators but said it has no specific plans.
A Hutchison spokesman said it would be premature to speculate on what Hutchison plans to do in Europe or on any alliance with NTT DoCoMo, which recently bought into Hutchison's Hong Kong mobile business.
However, most analysts said they would like to think Hutchison would eventually cash out of Vodafone. -   by Sheel Kohl in London & Ben Kwok      SOUTH CHINA MORNING POST   9 February 2000


Vodafone nears Mannesmann deal
Mannesmann, the German telecommunications group, looked set last night to accept a 173 billion euro (about HK$1.3 trillion) takeover bid by British mobile telecoms group Vodafone AirTouch.
The deal will mean that Hutchison Whampoa, a 10.2 per cent shareholder in Mannesmann, will become a smaller shareholder in the merged entity, but will reap a huge windfall from the deal.
At yesterday's prices, a new Vodafone offer could value Mannesmann at about 343 euros per share, which is more than double the 144.8 euros per share Hutchison was paid when it sold its British mobile-phone service, Orange, to Mannesmann.
A deal between Mannesmann and Vodafone would value Hutchison's stake at 17.7 billion euros.
Sources close to the deal confirmed Mannesmann's controlling supervisory board was expected to support a friendly merger with Vodafone at a meeting yesterday, ending months of hostility that began after Vodafone launched its bid in November.
Relations between the two companies have grown increasingly amicable over the past few weeks, after it became clear that Mannesmann shareholders were showing support for Vodafone's bid.
However, the turning point seems to have come after Vodafone changed the terms of its deal, giving Mannesmann shareholders 49.5 per cent of the group.
Vodafone's previous offer left Mannesmann shareholders with only 47.2 per cent.
Yesterday, neither company had any official comments, but Vodafone confirmed that "it has commenced discussions with the board of Mannesmann that may or may not lead to a recommended offer".
Under the terms of any deal, it is understood Mannesmann chief executive Klaus Esser will step down.
The merger will create one of the world's largest telecoms companies, and strengthen Vodafone's position as the largest mobile-phone company in the world.
Vodafone will get more than 17 million Mannesmann mobile subscribers in Germany and Italy, adding to its 19 million customers in Britain and Europe, as well as the 12.5 million users in the United States and Asia.  -  Sheel Kohl in London   
SOUTH CHINA MORNING POST    4 Feb 2002
Vodafone AirTouch sells US$5.25 billion global debt 
Vodafone AirTouch has sold US$5.25 billion of global debt, the largest corporate debt sale by a British company and the sixth-largest overall, according to market sources.
Strong demand for Vodafone's five-year, 10-year and 30-year debt allowed the British telecommunications giant to offer smaller yield premiums over treasuries than expected.
"We like their business model, the acquisitions they've done, and the Mannesmann acquisition," said Christopher Ayoub at Merrill Lynch Asset Management.
Vodafone might use proceeds to ease its debt burden once the Mannesmann deal went through, bankers said   -  REUTERS   SOUTH CHINA MORNING POST
Hutchison holds key
Hutchison Whampoa is emerging as one of the most important factors behind Vodafone Airtouch's plans to launch a 100 billion euro (about HK$801.7 billion) bid for Mannesmann, the diversified German mobile phone-to-engineering group.
The Hong Kong conglomerate has a 10.2 per cent stake in Mannesmann, which it acquired as one of its conditions for accepting Mannesmann's takeover of Orange, the British mobile-phone group in which Hutchison held a 44.8 per cent stake.
Hutchison is now the single largest shareholder in Mannesmann, and could prove to hold the casting vote over whether the German company remains independent or is swallowed up by Vodafone.
Bankers said that if Mannesmann - as it is expected to do - rejects a friendly approach by Vodafone, the company will almost certainly face a hostile bid, and Hutchison will come under intense lobbying pressure to back one of the two sides.
Mannesmann chief executive Klaus Esser indicated yesterday that he would strenuously resist a hostile bid and would seek to persuade shareholders that Mannesmann will be able to create more value as an independent company.
The company has already outlined plans to divest its vehicle, tubes and other engineering businesses, and it is keen to leverage off its telecommunications presence in Europe to command deeper penetration in new markets.
Vodafone however, as the world's largest mobile-phone group, will be able to offer Hutchison equity in its business and give the company exposure to mobile-phone networks across both Europe and the United States.
For Vodafone, Hutchison's support is particularly vital given the difficulty of mounting hostile bids in Europe.
In Mannesmann's case, in particular, a rule in its articles of association forbids any shareholder from voting more than 5 per cent of the company's total issued share capital, no matter how many shares it owns.
Under these rules, therefore, even if Vodafone had the support of Hutchison Whampoa, which has more than 10 per cent of Mannesmann's shares, it would only be able to wield influence equivalent to just under half that amount.
There are no other shareholders with similar sized holdings, which means that Vodafone will have to undertake extensive canvassing of Mannesmann's shareholders in order to garner enough support to force a takeover on the management.
Further complicating the issue is the fact that, under German takeover rules, a hostile bid can be approved only if 75 per cent of the target's shareholders is willing to back the bidder.
This may prove extremely difficult to achieve.
It is thought that Hutchison could prove a supporter to Vodafone, but in return would want to be ensured a significant stake in the enlarged Vodafone group.
A straight share swap is likely to give only a small proportionate shareholding, which Hutchison might not be content with.
Vodafone also has to grapple with the question of Orange, whose takeover by Mannesmann is irreversible but which Vodafone would have to sell if its bid for Mannesmann was successful.
Given that Vodafone is a direct competitor with Orange in the British mobile-phone market, Vodafone would run into monopolies and mergers regulatory constraints, by owning it.
But the company is understood to have lined up a range of potential bidders for Orange, with the leading contender said to be France Telecom. Analysts believe, however, that SBC of the United States, MCI WorldCom and even Bellsouth, would be potential bidders for Orange.
It is understood that Vodafone sees a takeover of Mannesmann as vital to its strategy to become an important player in the burgeoning European market but it is hoping that a hostile offer will not be necessary, and it has reportedly drafted sweetener proposals that would envisage Mr Esser becoming chairman of the Mannesmann board as well as taking on a key position on the board of the combined company.
It is also preparing elaborate plans to lay out a strategy that will see greater integration of Vodafone's mobile-phone technology with the Internet, launching a comprehensive "Internet in your pocket" concept where a combined Mannesmann and Vodafone will be at the core.  -   by Sheel Kohl in London    14 November 1999
PRICELINE
(Reuters) - Cheung Kong Holdings and Hutchison Whampoa, the twin flagships of Hong Kong tycoon Li Ka-shing, said on Thursday they would buy up to US$40 million worth of shares in online travel firm Priceline.com.
Cheung Kong and Hutchison jointly own 31 percent of Priceline.com.
A Hutchison spokeswoman in Hong Kong said the companies want to lend support to Priceline.com's share price and would start buying the shares next week.
Based on Priceline.com's closing price of US$1.85 on Wednesday, the purchase of US$40 million worth of shares will increase the companies' stake by about 9.4 percent, or 21.6 million shares.
In addition, the companies said in a statement Priceline.com plans to repurchase up to US$40 million worth of its own shares, which will further increase Hutchison and Cheung Kong's stake in the company to more than 40 percent.
"At the current valuation, we believe that the best investment Priceline.com can make is in our own company," Priceline.com's chairman Richard Braddock said in the statement.
Priceline.com, which sells discounted plane tickets on the Internet, said on Thursday its second-quarter profit rose to US$6.31 million from US$2.8 million in the previous year but revenue fell 16.5 percent to US$304.5 million.
The U.S. firm has formed a 35/65 joint venture with Hutchison and launched the service in Hong Kong in April, and plans to bring the Priceline.com business model to other Asian markets.    - 1 August 2002
Li boldly goes where few investors dare
Can Li Ka-shing succeed where Captain Kirk struggled? Hong Kong's richest tycoon has boldly expanded his commitment to bring Priceline.com to Asia despite investor disfavour that has brought the once astronomically valued online retailer back to earth.
Shares in the Connecticut-based "name your own price" retailer, known in the United States for ads featuring Star Trek star William Shatner, have fallen to US$3, down about 97 per cent from their 52-week high, as investors objected to its expansion from flogging airline tickets and hotel rooms into groceries and petrol.
But late on Thursday two firms controlled by Mr Li said they had bought US$73.52 million of Priceline shares from the company and its founder for a total stake of 17.54 per cent and a seat on Priceline's board.
Mr Li's Hutchison Whampoa conglomerate, which last year formed an alliance to bring Priceline to Asia also restated its intent to launch the Priceline model in Asia "soon".
By buying US$9.5 million worth of convertible notes in the venture, Hutchison now holds a 65 per cent stake of the Asia operation.
Mr Li's flagships Hutchison and property developer Cheung Kong (Holdings) bought equal stakes in Priceline.
Hutchison spokeswoman Nora Yong said the company had found that Asia was "very receptive" to the Priceline model.
She added: "There is a certain degree of customisation that needs to be done in Asia", and said the venture would initially sell such items as airline and hotel tickets.
While Hutchison, whose holdings include ports, telecoms and supermarkets, is known for its canny, unpredictable - and mostly successful - investment style, industry watchers were reluctant to say the Priceline initiative smacked of another case of Li magic.
"There's been a lot of doubts about the Priceline model," said SG Securities analyst Robert Sassoon.
"Obviously, they think that it's worth a go."
Priceline on Thursday posted a bigger than expected fourth-quarter loss but also said it expected to be profitable in the second quarter of the year as it returns to its travel services roots. The firm also recently launched a European unit.
"In the context of the Cheung Kong/Hutchison consortium, it's a very modest amount of money. It's almost Li Ka-shing's breakfast money," Mr Sassoon said.
He said Hutchison might apply Priceline as "another layer" to its A.S. Watson Group retail operation, which includes supermarkets, electronics, and a drug and personal-care chain.
Hutchison declined to say how the venture would be branded.
Part of Hutchison and Cheung Kong's expanded agreement with Priceline includes exclusive six-month rights to negotiate towards setting up shop with Priceline in Japan. The previous partnership covers several other Asian markets, including Greater China, the Philippines, India and Singapore.
Gartner Group Internet analyst Joseph Sweeney said a few Priceline-imitators had sprung up in Asia, with little success. He was sceptical of Hutchison/Priceline's longer-term prospects - at least as far as Asian airlines were concerned.
"The majority of the airlines are exceedingly wary" of Priceline-style discounting, he said.
Under the Priceline model, airlines and hotels sell seats or rooms that would otherwise go empty. The customer bids what he or she is willing to pay, and if the vendor accepts, a sale is made.
But in Asia, airline competition is far less intense than in Europe or the United States, and fares and standards of service are often high. Carriers would be loathe to cannibalise that business with cut-rate prices, Mr Sweeney said.
"There's a bit of a catch-22 for the airlines," he said, predicting that some carriers might sign on with Priceline to see whether it would be viable to set up a similar system in-house.
Neither Singapore Airlines nor Hong Kong's Cathay Pacific Airways, two of Asia's biggest carriers, had immediate comment as to whether they would sell tickets through Priceline.
On the other hand, Mr Sweeney said, the Priceline model could prove effective in Asia as a market for more mundane items, such as spare parts.
"I think there's a big opportunity for them in industrial applications."
Hutchison shares ended at HK$95.75, up 0.26 per cent, on Friday while Cheung Kong stock slipped 0.5 per cent to HK$97.50.   -    SOUTH CHINA MORNING POST  REUTERS   2001 February 16


Now that it has announced 10 name-your-own-price services for American consumers, priceline.com is taking the plunge in Asia through a joint venture with Hong Kong-based conglomerate Hutchison Whampoa.
The two are creating a new company, which will license priceline's business model, to launch and manage the Asian name-your-price service. The joint venture will serve consumers in China, Hong Kong, India, Taiwan, Indonesia, Singapore, Thailand, Korea, Malaysia, the Philippines and Vietnam. Hutchison will leverage its customer base, contacts, retail network and global data center capabilities to push the new venture along.
Priceline will also purchase a convertible note allowing it to take up to a 50% equity stake in the new company under certain conditions. Until then, although both are funding the venture, priceline won't hold an equity stake in it. Hutchison is purchasing equity securities in the new company and will provide management services. Pending approval, the venture is expected to launch its first service for leisure airline tickets late this year.
Separately priceline says the US Patent and Trademark Office has notified it that it has approved another of the company's patent applications. When issued, it will be priceline's seventh patent - it's applied for more than 25 - relating to its buyer-driven commerce system.
Priceline also posted its Q4 results. Revenue reached $169.2 million, up 791% from a year ago. It had a net loss of $10 million (six cents) versus a loss of $12.7 million (14 cents) in the year-ago quarter. Analysts were expecting an eight-cent-per-share loss. The year's revenue grew to $482.4 million, up from $35.2 million in 1998. Net loss for the year was $52.5 million (39 cents) versus a loss of $44.4 million (55 cents) the year before. The company has set a 2000 revenue target of $1 billion and expects to be profitable in the first half of 2001.    -  2000 January 29
Beijing Enterprises Partners with Hutchison Whampoa For Travel Joint Venture 
Beijing Enterprises (BE - 392) has announced that it will form a new joint venture with Beijing Capital Tourism Group (BCTG) and Hutchison Whampoa (13). 
The JV company, named Beijing Tourism Development Company Limited (BTDCL), will be 40% owned by Beijing Enterprises, 32.5% by BCTG and 27.5% by Hutchison. 
The three investment partners will inject aggregate assets with HK$1.27bn into BTDCL and contribute a sum of HK$15mn in cash as initial working capital. 
BTDCL will focus on hotel services and tourism services in the PRC and the U.S.    - QUAMRESEARCH  July 11, 2002 
INFRASTRUCTURE
  
CANADA -  17 June 2004 - A consortium headed by Cheung Kong Infrastructure Holdings is one of three shortlisted bidders for the C$600 million (HK$3.41 billion), 100km highway project from Vancouver to the Canadian ski resort of Whistler (above), Cheung Kong Infrastructure said yesterday. A Cheung Kong spokeswoman said the bidding process had not finished and the company had no further comment.
Diversification fuels giants growth
Property developer and global investor in ports, telecommu nications, retail, highways, and technology, Cheung Kong (Holdings) is all that and more. With stakes in businesses worldwide that cover nearly every aspect of daily life, tycoon Li Ka-shings flagship company has few global rivals that match its breadth.

As the parent company of the group, Cheung Kong controls almost half of Hutchison Whampoa. This conglomerate in turn owns about 85 per cent of Cheung Kong Infra structure Holdings (CKI), which has a roughly 39-per cent interest in Hongkong Electric Holdings.
Cheung Kong also has stakes in Growth Enterprise Market-listed CK Life Sciences International, (Holdings) and Tom Group, which will switch to the main board next month. As of the end of June, the groups combined market capitalisation amounted to some HK$500 billion, accounting for about 9 per cent of the total market capitalisation of the Hong Kong stock market.
On the main board, Hutchison was ranked third by market capitalisation in May while Cheung Kong was number nine.
In 2003, Cheung Kong reported a healthy rebound in sales to more than HK$14.33 billion, the highest level since 1994. Property earnings were boosted by contributions from the Rambler Crest residential develop-ment in Tsing Yi, after its completion date was advanced to 2003 from 2004. JP Morgan analysts said this week that consolidation in the property market is likely to continue in the next few months, with prices expected to fall by about 10 per cent as primary sales slow to fewer than 2,000 units a month dur ing the typically lethargic summer season.
JP Morgan added that developers are becoming less aggressive in their pricing of new projects but expects the next major launch to be the third phase of Cheung Kongs Caribbean Coast in Tung Chung. This phase will offer a total of 1,664 units with pre-sales set for mid-July.
OCheung Kong has been the most consistent over the last few yearsO in terms of selling the residential units of completed projects,O Morgan Stanley analyst Robert Hart said. OTheyre like a manufacturer. They sell what they have and this is good for share-holders.O
Improved earnings from the companys China properties also fattened the bottom line last year. Analyst Eva Lee of ING Financial Markets said that, over the next 12 months, Cheung Kong will see stronger sales and rising prices in increasingly affluent neighbouring Chinese cities such as Zhuhai, Shenzhen and Guangzhou.
OThe property market in Shanghai has experienced a big rally in the last two years. As a result, the central government has focused its efforts on controlling prices in Shanghai although, in the long-term, this will also depend on Chinas economic growth," Lee said.
The earnings outlook for the company in 2004 and 2005, however, appears less buoyant. According to estimates by BOCI Research analyst Manfred Ho, Cheung Kongs full-year net profit could fall to about HK$7.64 billion and HK$7.78 billion in the respective two years from more than HK$9.81 billion in 2003.
Ho pointed out that, in 2003, Hutchison accounted for about 60 per cent of Cheung Kongs total asset value and some 73 per cent of its earnings, capping property profits at about one-third of the total. Ho added that he expects losses from Hutchi sons 3G investment to drag down the conglomerates earnings by 54 per cent this year.
A decline in the first half profits of Hutchison subsidiary CKI in 2003 also weighed on Cheung Kong. Interim profits dipped 2.8 per cent year-on- year to about HK$1.4 billion, the first time the company reported negative earnings growth since its listing in July 1996.
CKI is understood to be keen to invest in Australias energy sector because of market transparency and consistent regulations.
It already has interests in power distributors CitiPower, ETSA Utilities and Powercor Australia as well as natural gas player Envestra. Its China energy joint ventures include plants in Liaoning, Henan, Jilin and Guang dong provinces.
The importance of CKIs transportation and infrastructure portfolio will only grow as the company continues to boost its presence in Australia.
Currently, it holds a 50-per cent interest in the A$1-billion Sydney Cross City Tunnel, due for completion in 2006. It also announced this week that it had spent A$239 million to buy a 40-per cent stake in the Lane Cove Tunnel Company, which will build and operate the Lane Cove Tunnel in Sydney for a 30-year period.
Once fully operational, these and other assets will be key to driving sustain able future growth for a company that has long prided itself on its diversification.   - by Dennis Eng    HONG KONG STANDARD       10 July 2004
PHILANTHROPY
Tycoon's $21m gift to 2008 Games

Hong Kong tycoon Li Ka-shing has donated HK$100 million (S$21 million) to Beijing's 2008 Olympics effort.
Mr Li's companies - Cheung Kong, Hutchison Whampoa, Cheung Kong Infrastructure and Hong Kong Electric - have chipped in to build a national swimming stadium that will feature five pools, the Sunday Morning Post reported.
The cheque was handed to the Olympics organising committee chief Liu Qi, who is also the capital's Communist Party boss, by Mr Li's son Victor in Beijing's Great Hall of the People.
Mr Li's gift is half that given last year by another magnate, Hong Kong's Olympics chief Timothy Fok, the report added. - 2004 November 1   AGENCE FRANCE-PRESSE   
Li Ka-Shing : The Global Philanthropist
Business Week article   1 Dec 2003


As Hong Kong's richest man, Li Ka-shing has given away plenty of dough -- and quite a few oranges, too. Through the Li Ka Shing Foundation, Li and his companies have dispensed some $640 million since 1980, footing the bill for projects such as an 18-story building at Hong Kong Polytechnic University and a literacy program in the city. And Li isn't above the sort of grand geste that earns him a bit of good press: During the SARS outbreak last spring, the foundation donated a million fresh oranges to local health-care workers.
Mr Li Ka-shing unveils a plaque to mark the opening of the Hutchison/MRC Research Centre at the Cambridge University. (Courtesy of MRC)Mr Li Ka-shing pictured with (left to right) Lord Sainsbury of Turville, Minister for Science and Innovation, the United Kingdom; Sir George Radda, Chief Executive of the Medical Research Council; Sir Alec Broers, Vice Chancellor of the University of Cambridge; and Sir Keith Peters, Regius Professor of Physic, School of Clinical Medicine, Cambridge University   (Courtesy of MRC)
Li's penchant for public giving is something of an anomaly, though. Far more common are lesser tycoons, who give away millions but do little to publicize their generosity. The result is that charitable giving doesn't have the same profile in Hong Kong as in the U.S. -- or the same level of public participation. "In the U.S., there's a whole [philanthropy] industry," says Christine Loh, CEO of Civic Exchange, a local think tank. "Here, there's a lot less transparency and it's not as sophisticated."

That may be changing. Like Li, a handful of charities in the city are getting savvier. Hong Kong Polytechnic this year launched an alumni outreach program to try to boost its funding. The Hong Kong Council of Social Service, which brings together some 300 groups that work with the poor, last year started seminars for members and potential donors. And the local Society for the Prevention of Cruelty to Animals in November created the post of business development director after seeing its donations fall over the past three years. "I need more money in the bank to do the work," says executive director Pauline Taylor.

Why the push to professionalize? With the economy in a funk, big donors have been slowly closing their wallets. Donations to the Community Chest -- an umbrella group for dozens of charities -- have fallen by 25% since 2000. So organizations are hitting the streets more often to raise money directly from the public. The government, which had allowed charities to raise funds from pedestrians only on certain Saturdays, is now permitting such outreach on weekdays. "During bad times, the needs of the unfortunate grow," says Darwin Chan, vice-president for Asia of United Way International and former head of the Community Chest of Hong Kong. "But many companies are now making donations on a more limited scale."

Charities may soon get a further boost from new government initiatives. In most countries, tax breaks encourage giving. But under Hong Kong's flat-tax system, even the wealthiest pony up only 15% of their income. "There's little tax incentive to donate more money," says Joseph Chan, a professor at the University of Hong Kong. To kick-start giving, the government in March announced a program to match donations to local universities, and it has raised the limit of charitable donations taxpayers can deduct from taxable income. Activists also want an amendment to the tax law that would let donors deduct from their taxable income two times the amount they give. If it passes, Li Ka-shing might want to calculate just how much 2 million oranges are worth. 
   - By Bruce Einhorn in Hong Kong    
BUSINESS WEEK ONLINE     1 Dec 2003

Li Ka-shing Meets Tony Blair
Scholars of Blair-supported project urged to seize CEPA opportunities


The Chairman of Hutchison Whampoa Limited Mr Li Ka-shing, held a private meeting with British Prime Minister Tony Blair today during the premier's brief stay in Hong Kong. Mr Li was joined by Mr Victor Li, Deputy Chairman of HWL , for the one-hour meeting.
HWL is by far the largest Asian investor in the UK, with interests in projects worth more than £10 billion. Hutchison has enjoyed a good track record with its UK investment, and projects ranged across several sectors, employing a total of 23,000 staff. HWL is pioneering the roll-out of 3G services in the UK as the operator of the first mobile multi-media 3G services. The Group owns three container terminals, namely Port of Felixstowe, Harwich International Port and Thamesport, retail chains Superdrug and Savers as well as a number of premium property projects in London.
In a separate meeting held this afternoon, Mr Li met a group of 18 Hong Kong scholars of the Chevening Scholarship Scheme, which was strongly supported by Mr Blair to attract more overseas postgraduate students to Britain to follow courses at British universities and higher education facilities.
Mr Li has urged the Chevening scholars to make good use of their professional knowledge and knowhow and seize each and every opportunity brought about by the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Mainland so as to help Hong Kong through the present economic doldrums.
Mr Li through the Hutchison Group has donated a total of £2.02 million towards the scholarships over a four-year period beginning last year, which has expanded the scheme to include 63 extra scholarships each year for Hong Kong and Mainland Chinese postgraduate students.
The British Government and Cambridge University are making a matching contribution to the scheme.
About one quarter of these new scholarships are being allotted for studies at Cambridge University, which is a staunch supporter of the scholarship scheme.
Mr Li, a strong believer in continuing education and life-long learning programmes, said he was pleased to see that the Hutchison Chevening Scholarships had supported the further education of high-calibre Hong Kong and Mainland Chinese graduates and business managers.
"I hope that the Hutchison Chevening Scholarships will help them broaden their experiences and I also hope that they will contribute their strength and professional knowledge to society after they have completed their studies in the UK," Mr Li said, adding that he appreciated particularly Cambridge University's active participation.
The Hutchison Chevening Scholarships, an integral part of the Chevening Scholarships Scheme, started last October and will run for four years.   - 2003 July 23   HWL

State-of-the-art cancer research centre opens in Cambridge
Supported by a £5.3 million donation from Hutchison Whampoa
A state-of-the-art cancer research centre was officially opened at the Cambridge University by Mr Li Ka-shing, Chairman of Hutchison Whampoa Ltd; and Lord Sainsbury, Minister for Science and Innovation, on 18 May 2002.
Named the Hutchison/MRC Research Centre, the project arises from a collaboration between the Medical Research Council (MRC), the University of Cambridge and Cancer Research UK. Construction of the new building was made possible by a £5.3 million donation from Hutchison Whampoa Limited, to match funding from the MRC.
Mr Li Ka-shing said: "We are pleased to be joining force with a world leading University and the Medical Research Council to further the study on cancer. Cancer is now the number one killing disease. Through medical research and practical applications, we hope that we are able to find better cure and prevention of this disease, and therefore benefit all mankind."
Lord Sainsbury, Minister for Science and Innovation, said, "Cancer is one of the biggest killers in this country, and the Government has made tackling the disease one of its central priorities. This centre forms a key part of our drive to strengthen cancer research in the UK, and we greatly appreciate the extremely generous donation of Hutchison Whampoa Ltd to it."
With the opening of the Centre, there are more opportunities to exploit research knowledge for the benefit of cancer patients. The aim of the Centre is to bring basic research in cell biology and genetics toward application for the prevention, diagnosis and treatment of cancer.
Toward this end, the building has been designed to optimize interactions, especially those between medical doctors and basic laboratory researchers. The Centre is built adjacent to Addenbrookes Hospital to enable scientists and clinicians to work closely with patients.
State-of-the-art equipment is also available in core resources, including those for DNA sequencing, molecular cytogenetics and molecular pathology. These facilities allow analysis of tumour cells and tissues to detect gene mutations and changes in chromosomes and cancer markers.       


Hong Kong tycoon Li Ka Shing has donated S$19.5m to the Singapore Management University (SMU), the largest donation a Singapore tertiary institution has ever received.With a 3-to-1 matching grant from the Singapore Government, Mr Li's donation will generate another $58.5 million for SMU.
Dubbed Superman in Hong Kong, the self-made tycoon's rags to riches story has inspired many.
Mr Li, a global entrepreneur, is also no stranger to Singapore.
He has invested widely here and has contributed to various educational causes here.
But Mr Li's latest gift - S$19.5m to SMU - is the biggest donation ever made to a tertiary institution.
He was persuaded to do so by the former Counsel-General to Hong Kong, Mr Chan Heng Wing.
Mr Chan, who is now Ambassador to Thailand, said: "Mr Li is a good friend of Singapore. He knows many of our leaders very well. He also comes down to Singapore very often. I met him for lunch regularly. In the course of these lunches last July, I asked if he has heard of SMU. My intention was to see if Mr Li would lend his name to a building or something like that because he's such a prominent entrepreneur in Asia! At first, he was very reluctant to lend his name. He said 'I'll give some money but I don't want the publicity.' So I'm very pleased that he's agreed to have the library named after him."
$15m of the donation will go towards setting up the SMU library at the new city campus at Bras Basah.
When completed in 2005, the library aims to be the best resource centre in Singapore.
The other $4.5 million will fund scholarships, which will bring up to 8 top scholars a year from China or Hong Kong to SMU, starting next year.
Justin Chiu, executive director of Cheung Kong Holdings, said: "Mr Li himself is very fond of Singapore. (He has respect for all the past and present leaders of Singapore. And) he thinks Singapore is a good country providing good legal system, Singapore has the free flow of foreign currencies and Singapore has provided enough talents for the business community to develop their business."
The private university is elated that SMU has caught Mr Li's attention.
Ho Kwon Ping, chairman of SMU Board of Trustees, said tongue-in-cheek: "The fact that someone, a global entrepreneur like Mr Li Ka Shing has chosen SMU, we'd like to think that he's got a good eye for talent and quality in everything that he does, and that we fit in very well with his vision of entrepreneurship, and his ideas of innovation and creativity which he does everywhere else."
"And he's spotted a winner!" added a smiling Mr Ho    -  YAHOO!      10 Sept 2002       

Li Ka-shing sponsors overseas study tours


Tycoon Li Ka-shing is sponsoring 1,000 secondary students for overseas study of environmental protection and technology.
The Li Ka-shing Foundation announced it would donate $7 million to finance Millennium Study Tours.  Each secondary school is expected to be allocated two places.
The students - split into groups - will visit projects dealing with environmental protection and new technology, a foundation spokesman said.
Students with outstanding academic records and social skills will be selected to join the trips to the mainland, Southeast Asia, Europe, the United States and Australia.
Fifty teachers will be selected as chaperones.
Details of the trips, which are supported by the Education Department, will be announced next month.
Mr Li, who heads Cheung Kong (Holdings) and Hutchison Whampoa, has donated nearly $3 billion to various causes over the years.
The Li Ka-shing Foundation was set up in 1980 to promote the development of education, health care and social welfare in Hong Kong, the mainland and overseas. - by Antoine So     SOUTH CHINA MORNING POST    
Hong Kong companies gave a big boost to Beijing's preparations for the 2008 Olympics with Hutchison Whampoa signing up for a US$150 million tourism joint venture and Kerry Properties agreeing to back a plan to develop the capital as a logistics hub.
At a signing ceremony in a Beijing Hotel on the second day of the fifth Beijing-Hong Kong Economic Co-operation Forum, Beijing officials announced they had secured 30 agreements involving as much as US$1.3 billion.

The biggest deal signed brings together Hutchison, the city's flagship company, Beijing Enterprises Holdings and a Beijing-based travel services firm in setting up a company with a registered capital of US$100 million to develop travel-related businesses, in particular hotels and developing tourist attractions.    - 2002     SOUTH CHINA MORNING POST     
Billionaire sings praises of economies Old and New
'You still need people to produce oil and gas'

Winnipeg -- Hong Kong billionaire Li Ka-shing said yesterday that the Old Economy is alive and well -- and so is he.
Many companies operating in the Old Economy, including Canadian resource firms, will thrive because of technological innovations, Mr. Li said during a rare public appearance in Canada.
Mr. Li, chairman of Hong Kong-based Cheung Kong (Holdings) Ltd., founded the company almost 50 years ago as a maker of plastic toys. He built it into a flagship conglomerate with investments today ranging from property development and container ports to telecommunications and e-commerce.
"We have Old Economy, we have New Economy," said Mr. Li, who turns 72 next week.
Even with the rise of the Internet, "you still need people to produce oil and gas. . . . The New Economy is like a new tool -- it creates lots of additional benefits."
While acknowledging that business opportunities presented by the New and Old economies make him wish he was 20 years old again, a smiling Mr. Li said he's in good health and rejected speculation that he would be undergoing a heart bypass operation.
Mr. Li, one of Asia's most powerful and influential businessmen, dismissed recent media reports in Hong Kong that said heart troubles had forced him to seek hospital treatment on the weekend.
"That's our Hong Kong press. Many times they just make [up] a story and make it more attractive and can sell more copies," he said during a visit to Winnipeg, where he received the International Distinguished Entrepreneur Award (IDEA) from associates of the University of Manitoba's Faculty of Management.
"My only problem? I cannot play golf for the coming one month. I twisted and hurt my left knee. That is the true story."
Previous winners of the IDEA honour, which has been presented annually since 1983, include Sony Corp. co-founder Akio Morita of Japan, U.S. businessman Ross Perot and Winnipeg entrepreneurs Izzy Asper and Albert Cohen.
Mr. Li is also chairman of Hong Kong-based Hutchison Whampoa Ltd., a company whose major shareholder is the Li family.
Calgary-based Husky Oil Ltd. is 49 per cent owned by Hutchison, while the Li family owns 46 per cent and Canadian Imperial Bank of Commerce holds 5 per cent.
Mr. Li's eldest son, Victor, is co-chairman of Husky and used to spend much of his time in Vancouver in the early 1990s. Another son, Richard, formerly worked as an investment banker in Toronto.
Both sons play key roles in the Li family's global business empire. Victor is Cheung Kong's managing director and deputy chairman and Richard heads up the high-tech Pacific Century Group and serves as Hutchison's deputy chairman.
Li Ka-shing's rags-to-riches story has earned him the nickname "Superman" among Asia's business elite.
At age 12, Mr. Li fled China after the Japanese occupation, forcing him into what was then the British colony of Hong Kong.
He said yesterday that he's pleased to be honoured in Canada. He said he hopes that all entrepreneurs will remember to balance the demands of work with social and philanthropic obligations.   - 2000 June 7     by Brent Jang    THE GLOBE AND MAIL
Asia's Canadian connection
Albert Cohen was an early believer in Japan's Sony Corp.

The University of Manitoba is going to honour Li Ka-shing, Hong Kong's richest tycoon, next year as its International Entrepreneur of the Year award recipient.


This is news. And it is notable because Mr. Li, a reclusive billionaire, routinely turns down any honours anywhere.


But his acceptance is entirely due to Albert Cohen of Gendis Corp. in Winnipeg. Self-effacing and disarmingly friendly, Mr. Cohen is one of Canada's most well-respected businessmen in Asia due to the fact he was an early backer and close friend of the late Akio Morita, co-founder of Sony.

I found out about Mr. Li's acceptance when I called up Mr. Cohen last week to discuss Morita's recent death just two weeks ago.


"I feel it's a real personal loss and it was a unique relationship we had," he said. "I visited with him in Hawaii last year and the year before. He had a stroke and was immobile. He couldn't use his facilities and couldn't speak. It was a very sad circumstance but we were friends and I was glad I visited."

Cohen is one of six sons who grew up poor in Winnipeg. The six parlayed the family's small retail operation into a highly profitable national wholesale jobber, thanks to importing innovative products such as the world's first ballpoint pens.

Chief "buyer" was Albert Cohen who first tracked down Mr. Morita and his co-founder, Masaru Ibuka, in 1955 while on his honeymoon in Japan. Sony had come out with one of the world's first transistor radios and Mr. Cohen had spotted these clumsy contraptions and realized their marketability. He hunted down the two and found them in a dilapidated factory outside Tokyo.
He signed the company's first export deal and Mr. Morita later said that export contract to Canada saved his outfit from impending bankruptcy. Sony was about to be victim to the large Japanese trading companies who bought innovations by shutting them out of the retail outlets they controlled.
Then along came the friendly Canadian. Besides providing badly needed cash flow, Mr. Cohen's purchases revealed other strategies which had not dawned on Morita and Ibuka.

"I have always believed in what I called the Triangle of Success. I didn't want the cheapest product, I wanted the best. This was unique for an importer to say to the Japanese at the time because they had a reputation for second-rate exports. Morita understood what I was saying. The apex of the triangle is quality. The other sides are distribution and advertising and I had both to offer him. Without all three you cannot be successful, I told him," said Mr. Cohen.

Three years later, Morita began marketing Sony worldwide after the "pilot project" with Gendis in Canada had proven successful.

For 40 years the two men did land-office business together. Then in 1975, Sony and Gendis entered into a unique joint venture, the only one of its kind in the world, with Sony giving Gendis control or 51% of the action for 20 years. The deal ended by mutual consent in 1995 with Sony paying Gendis $207-million for its 51%.

Along the way, Gendis benefitted from the association and built a conglomerate based on its success in selling Sony products, acquiring other retail and natural resource assets. The partnership ended at Gendis' request because the nature of Sony's business was changing and the Tokyo inner circle, namely Morita and Ibuka, were gone. Ibuka died three years ago.

The story of Cohen and Morita underscores the fact that so much of Asian business is "relationships business" or agreements reached by handshake between persons who are also friends. In the West, business is more transactional and even enemies can mutually profit from deals struck together.

That's why Mr. Cohen's reputation precedes him in Asia where he is known as Morita's good Canadian friend, thus Li Ka-shing's agreement to receive the award.

I also benefited from the power of Cohen's reputation. I remember asking Mr. Cohen if he could request an interview for me with Morita in Japan in 1993. At the time, I had made similar requests for prominent people in Japan through the Japanese government's foreign press office and had been disappointed because the officials had given me appointments with only third- or fourth-tier officials and businessmen.
But after Cohen faxed Morita with a request for an interview, Morita agreed within an hour or so. When I informed the foreign press office in Tokyo I had an interview with Morita, they faxed back a completely revised and upgraded, schedule of interviews in "recognition" of my higher-than-assumed status. Obviously, it was second-hand status, thanks to Albert Cohen's relationship with Morita.
"Morita had integrity and was honest about everything. He was an exceptional and talented man," recalls Mr. Cohen."I will miss him."  -  1999 October 19    by Diane Francis     FINANCIAL POST       
CANADA
Li faces C$4b Air Canada call
Victor Li's Trinity Time Investments may need to inject C$4 billion (HK$23.76 billion) into Air Canada as part of the agreement to acquire the financially troubled airline.

It was a ``critical'' condition of the agreement that the airline must order as many as 105 new mid-sized planes by the end of January, Canadian Press said, citing bankruptcy court documents.
That would require about C$4 billion in funding over the next five to seven years on top of the C$1.1 billion Air Canada raised from Trinity and share sales to creditors, it said. Trinity earlier outbid Cerberus Capital Management for a stake in Air Canada by agreeing to pay C$450 million.
The airline had identified Bombardier, Embraer, Boeing and Airbus as possible suppliers, but was not clear on which ones it would pick, Serge Beaulieu, spokesman for Air Canada's main pilot union told the news agency.
The choice of new aircraft would be a key to another condition of the agreement, which said that it had to reach a ``satisfactory resolution'' about which pilots would fly them.
Labour unions of the airline and its subsidiary, Air Canada Jazz, had been mired in a dispute since June over whether Jazz's pilots had the right to bid for work on the new planes.
Air Canada's pilots insist all new orders should go to the main airline.
Beaulieu said the union understood it was a part of the agreement that the dispute be resolved, but added that it could not be realistically addressed until they knew what types of plane Air Canada would order.
Meanwhile, Li would hold a veto over most major decisions at the airline under the terms of the investment agreement even though Trinity would own only a 31 per cent stake, Canada's Globe and Mail newspaper said.
The agreement document, which will be filed in court, gives Li veto rights over 23 matters, from the hiring and firing of the chief executive to most asset sales or purchases exceeding C$50 million, the paper said.
Carol Hansell, a corporate governance expert at law firm Davies Ward Phillips & Vineberg, said such arrangements were common in private companies, but less so in listed firms.
``Basically, what they've done is take the powers of the directors and handed them over to a shareholder, which is an unusual thing to do from a public company perspective,'' Hansell said, adding that directors acted in the company's interest but a shareholder only acted in his own interest.
``If I were investing in this company, and I knew that somebody who only had 31 per cent of the economic interests really got to call all the shots and would do that in their own interests and not in the interests of the company - I wouldn't be comfortable with that,'' she said.
Any holder of 15 per cent or more of class C shares, the kind of shares that Trinity will be paid, retains 49 per cent votes on issues such as the election of directors.
Some observers have suggested that, while the proposal from Cerberus would insist on some of the same veto rights, the list might not be as exhaustive because of Canada's foreign ownership restrictions.
Canadian law bars foreign investors from controlling or holding more than 25 per cent of the votes in an airline. Li is not subject to the restrictions since he has Canadian citizenship.
Some stakeholders planned to argue that the court should at least consider the Cerberus bid when Air Canada asks Justice James Farley to approve Trinity's deal early next month, the paper said.    HONG KONG STANDARD       29 November 2003

  • Mulroney part of Air Canada bid
  • Cerberus rebuffed Li's equity offer
  • Air Canada sets date for court
Mulroney part of Air Canada bid 
Former prime minister stands to be made airline's chairman if plan succeeds

Paul Vieira, with files from Barry Critchley
National Post - Friday, November 28, 2003


Brian Mulroney, Canada's former prime minister, is helping to orchestrate an attempt by a Wall Street hedge fund to reopen the bidding process for Air Canada -- and stands to be made chairman of the airline if he succeeds, sources have told the National Post.

Mr. Mulroney is senior legal advisor to Cerberus Capital Management, which lost out earlier this month to Victor Li, the Hong Kong businessman, to become the insolvent airline's new equity sponsor. Sources, who did not want to be named for this story, say the former Tory leader has played a role in helping Cerberus launch a revised, but unsolicited and controversial, offer for the airline, and is lobbying Air Canada executives to get them to reconsider.

A copy of Cerberus's initial bid for the airline, obtained by the Post, indicated the fund had slated Mr. Mulroney to be one of 12 directors on a revamped board. Sources say Mr. Mulroney would, in fact, be named chairman of the airline he privatized as prime minister in 1989 -- which saw Ottawa collect roughly $492-million for its shares.

"If Cerberus wins, Mulroney is the new chairman of Air Canada. Cerberus has already said that," a source close to the restructuring said.

"Mulroney has made personal calls to Air Canada board members and Air Canada management on this issue. He's up to his ears on this," said another source, who has ties to the Montreal business community.

Mr. Mulroney was not at his Montreal law office yesterday and did not return a phone call.

Cerberus, named after the monstrous three-headed canine that guarded the entrance to Hades in Greek mythology, retained Mr. Mulroney's law firm Ogilvy Renault to act as its legal advisor during the fund's attempt to become Air Canada's equity sponsor.

The airline began a search for an investor last July in order to find a party willing to inject at least $700-million to help the insolvent airline exit bankruptcy protection, which it filed for last April 1.

Air Canada narrowed its list of equity partner finalists to Cerberus and Mr. Li, who holds Canadian citizenship and is the son of Li Ka-shing -- the Hong Kong industrialist and one of the world's wealthiest individuals.

On Nov. 8, the airline's board of directors, in what sources say was a unanimous vote, opted for Mr. Li's Trinity Time Investments, which agreed to put up $650-million for a 31% stake.

The board voted in unison even though Mr. Mulroney, sources say, tried to lobby directors with whom he has close ties.

"He leaned on them -- but despite that leaning, the board still saw the math and said, 'No, Li is a better candidate,' " the restructuring source said.

Among the board members Mr. Mulroney targeted, sources indicate, are: Raymond Cyr, former chairman and chief executive of BCE Inc., Bell Canada's holding company; David Angus, a Montreal lawyer and former head of the main Progressive Conservative fundraising organization; and Fernand Lalonde, a one-time political strategist for Robert Bourassa, the late Quebec Liberal premier.

Air Canada's court-appointed monitor, Ernst & Young, said in a report filed this week neither Mr. Li nor Cerberus "expressed any concerns" the investor search was proceeding in a manner that was "unfair to them or which deprived them of a fair opportunity to make their best proposal."

But in court documents filed by Air Canada this week, Cerberus informed the Montreal company it failed to put forth its best offer and wanted to try again. It submitted two revised offers that appear to be richer than Mr. Li's. More specifically, some of Air Canada's creditors, owed between $8-billion and $10-billion, have voiced support for the revised bid because it gives them a better chance to recoup more of their money.

Air Canada has refused to consider the Cerberus offer, saying that doing so would violate the agreement with Mr. Li.

It has applied for court approval of the Trinity agreement, which is required by Dec. 20 as a condition of the deal.

The Cerberus offer, while welcomed by some Air Canada debtholders, has earned scorn from some senior financiers on Bay Street, saying it demonstrates bad faith on the hedge fund's part after it participated in what was described by the court-appointed monitor as a fair, transparent process.

"If they reopen the bidding process, the precedent that would be set for any auction process would be astounding," said a Bay Street executive, who has no ties in the Air Canada restructuring. "Why would anyone put their best foot forward in an auction? They would just throw in a bid after the fact."

Cerberus, whose representatives did not return phone calls, manages close to US$10-billion in assets and is known as a turnaround artist that buys distressed assets, oversees their restructuring and sells them years later at a healthy profit.

But it has done so by rubbing many people the wrong way.

A senior banking executive said: "Look at what Cerberus does at every process they get into. They hold it hostage so they can squeeze out some type of payment for themselves -- with no commitment to building any value at all."

The executive, who requested anonymity, said Cerberus's unsolicited bid is nothing more than "sour grapes" on the fund's part.
Cerberus rebuffed Li's equity offer
Gesture by winning Air Canada bidder was refused due to holding period: source
s 
  

Paul Vieira and Barry Critchley - Financial Post
Friday, November 28, 2003


Shortly after he won the bidding process for Air Canada, Victor Li offered the loser, Cerberus Capital Management, a chunk of his stake -- only to be turned down because the hedge fund would be prohibited from selling the equity for at least 18 months, the Financial Post has learned.

It's the latest revelation to emerge about Cerberus and its attempt to reopen the bidding process for the insolvent airline, after losing out to Mr. Li's Trinity Time Investments group.

Documents detailing Cerberus's initial bid, dated Sept. 25, revealed the fund: offered to pay $500-million for a 22.2% economic interest and underwrite a rights offering of another $500-million; would install Brian Mulroney, the former prime minister, as a director on a revamped board; intended to sell Air Canada subsidiaries -- notably Aeroplan, the frequent-flyer program; Jazz, the regional carrier; and aircraft maintenance arm -- in an effort to "optimize shareholder value;" and asked that regional jets be operated by pilots at Jazz, who earn less than their counterparts at the mainline carrier.

Mr. Li's gesture toward Cerberus was made at a meeting convened by Air Canada, after the fund notified the airline it was unhappy with the result of the four-month equity solicitation process and planned to launch a counteroffer, sources said.

Mr. Li, son of Hong Kong industrialist Li Ka-shing, was selected on Nov. 8 by Air Canada's board, by agreeing to take on a 31% stake in exchange for $650-million.

Sources familiar with the meeting, held days after the board's decision, say Mr. Li offered less than a third of his stake to Cerberus as a gesture of goodwill. The only condition was that Cerberus would be banned from trading the stock for 18 months.

Cerberus, in turn, said it would entertain the offer only if the trading ban were cut to six months. That counteroffer was rejected.

Calls to Cerberus representatives yesterday were not returned.

The information provided by independent sources add details to the latest report from Air Canada's court-appointed monitor, Ernst & Young. The monitor said a meeting took place between representatives for Air Canada, Mr. Li, Deutsche Bank (which is slated to underwrite a $450-million rights offering under the Trinity offer) and Cerberus. The topic was the hedge fund's participation in the offering, which gives creditors a chance to buy stock in the restructured airline on the same terms as Mr. Li.

The monitor said following initial discussions, Cerberus warned it would submit a revised offer for Air Canada unless talks resulted in it "receiving a participating interest."

The hedge fund, named after the three-headed dog that guarded Hades in Greek mythology, has since tabled two revised bids it wants Air Canada to consider: one that sees it invest $650-million for a 27% stake and another that gives Cerberus 11.9% of the airline for $250-million, as well as a guarantee to backstop a $850-million rights offering.

The airline, however, has refused to consider the reworked deals, saying doing so would violate terms of the Li agreement. Instead, it has opted to get court approval of Mr. Li's deal.

In court documents filed this week by Air Canada, it was revealed Cerberus told the airline it failed to produce its best offer during the final stages of the bidding process and was willing to be more "flexible" in producing a new bid.

Details of an early Cerberus offer -- which valued Air Canada at $2.25-billion -- indicate the hedge fund was willing to invest $500-million in Air Canada for a 22.2% economic interest, and underwrite a $500-million rights offering. The fund said its investment structure complied with federal laws governing foreign ownership of airlines, limited to 25%. It also said Cerberus expected Air Canada to work with it in persuading regulators to boost the limit.

Sources indicate Air Canada's directors were uncomfortable with Cerberus's proposed ownership structure, saying it would likely fail a "gut check" test with regulators. Moreover, the structure is said to have copied heavily from the Canadian Airlines model, which saw American Airlines hold a 33% economic control but a 25% voting interest in the distressed carrier. But American was able to install its own personnel in key positions, giving the U.S. carrier de facto control.

"[The regulators] are not going to let that happen again," said an insider familiar with airline regulation. "They were not happy with what happened at Canadian Airlines."

Mr. Li's bid was endorsed in part because he holds Canadian citizenship, making his bid cleaner.

One of the people the fund is looking to for guidance on foreign ownership is Mr. Mulroney, the former Tory prime minister. He is the senior legal advisor to Cerberus, but is to become Air Canada's chairman of the board if the fund is successful in its bid for the airline. He was listed as one of four directors Cerberus planned to appoint to a revamped, 12-member board.

Another key element of the Cerberus plan was to split up the company and sell off prized subsidiaries six to 18 months after the deal closed. It identified Aeroplan, Jazz, and the aircraft maintenance and cargo handling units as items to be put up for sale. "Each of these businesses presents significant organic or third-party growth opportunities and/or are capable of being monetized through a capital market transaction," the offer said.

Earlier this year, Onex Corp. and Air Canada reached a deal on Aeroplan, which would have seen the buyout firm acquire 35% of the frequent-flyer plan for $235-million. That deal, however, fell through after the airline filed for creditor protection.

But a potential sticking point in the initial Cerberus offer was a requirement that regional jets be operated by pilots from the regional carrier, Jazz. Those pilots earn less money than their mainline counterparts and would result in significant costs savings, hence increasing potential profits for Cerberus.

However, this would likely spark labour fury with the Air Canada Pilots Association, the union that represents mainline pilots. Air Canada was almost forced into liquidation last May when the airline and the union were at odds over a new collective agreement on this very issue. A deal, struck at the last minute, was reached but only after the union agreed to allow an arbitrator to decide which set of pilots could fly the regional jets.

Also contained in the initial offer document was a request by Cerberus for a $15-million "commitment" fee for closing the deal.

Mr. Li's agreement calls for a similar kind of payment, only he is scheduled to get $6.5-million.
Air Canada sets date for court
Will ask for approval on Trinity deal and direction on rival bid from Cerberus

By Keith McArthur - From Friday's Globe and Mail

Air Canada will head to court in 10 days to ask Mr. Justice James Farley of the Ontario Superior Court to approve a controversial equity deal with Trinity Time Investments Inc., a company controlled by Hong Kong businessman Victor Li.

Time has been set aside for Dec. 8 or 9 for the court to consider the motion, as well as questions about what to do with a rival, unsolicited bid from New York-based Cerberus Capital Management LP that was received after the end of the equity solicitation process.

Legal observers predict that Judge Farley, the judge overseeing Air Canada's restructuring, will be reluctant to reject the Trinity deal -- unless he can be persuaded that the process was unfair.

It is believed that Cerberus lawyers will suggest that the process, by definition, was flawed because it did not bring out the best bids.

Several large creditors are expected to argue that Judge Farley should select the deal that is best for creditors -- even if it came after the end of the formal process.

But lawyers for Air Canada and Trinity will say the court must respect the process and endorse the Trinity bid.

They will argue that the court can respect the process and still protect the interests of creditors.

That's because Trinity's deal with Air Canada contains specific procedures about how to handle a richer bid. The deal allows Air Canada to consider bids that are better for creditors if ordered to do so by the courts.

In theory, Trinity would have the chance to sweeten its bid -- or allow Air Canada to sign a deal with a rival bidder and settle for a break fee of $19.5-million.

Lawyers supporting the Trinity bid will argue that the court must take its opportunity to approve a sure thing. After all, Trinity can walk away from the deal if it doesn't get court approval by Dec. 20.

Sources close to Trinity say they would not even consider improving their bid unless the current one is first approved by the courts.

Financial creditors believe they will get significantly better recovery under the Cerberus bid because it grants them rights to buy up to $850-million in Air Canada shares at favourable rates, compared with $450-million worth of rights under the Trinity bid.

Some of the creditors -- especially the large financial institutions with the wherewithal to buy new shares -- are planning to go to court to challenge the Trinity deal and urge court to consider the Cerberus bid.

On Nov. 8, Air Canada chose Trinity Time over Cerberus as its equity sponsor.

Two weeks later, Cerberus fought back with two separate unsolicited offers.

The airline does not consider those offers to be binding, but it is believed that Cerberus will submit a detailed binding offer to Ernst & Young Inc., the airline's court-appointed monitor, as early as today.

Cerberus believed it did not have the chance to submit its best bid, according to a report by the monitor. The airline's unions are expected to ask the court to see copies of the Cerberus proposals so they can make a determination about which is the stronger bid.

"If we find one's better than the other, we're not scared of taking a position, but so far they both look the same," said Gary Fane, director of transportation for the Canadian Auto Workers union.

Air Canada's chief financial officer Rob Peterson has already sworn an affidavit stating that the process has been "fair, open, transparent and, above all, highly successful."

The airline may also make the case that it wants an equity sponsor that can be a driving force in the airline's future, rather than just an investor who will guarantee a rights offering.

Airline officials have suggested that if Air Canada wanted to do a rights offering, it could have done that through any number of major financial institutions, instead of with Cerberus.      - 28 Nov 2003



Cerberus Capital Manage-ment has re-entered the battle to buy a major stake in Air Canada, less than two weeks after being beaten by a rival offer from Hong Kong-based businessman Victor TK Li.
The aggressive New York-based investment group has sent an unsolicited offer to Ernst & Young, the court-appointed monitor overseeing Air Canada's restructuring, in a move that threatens to spark a bidding war.
Mr Li's company Trinity Time Investments had been declared winner of the bidding process after offering to pay C$650m for a 31 per cent stake in Air Canada and the leading role in shaping the new board. Mr Li's offer also allowed for a C$450m ($US346m) rights issue, open to the airline's creditors and underwritten by Deutsche Bank.
Trinity yesterday denounced Cerberus's move as "improper interference in the Air Canada restructuring process . . . We do not believe the best interests of Air Canada, its employees or the travelling public, would be served by accepting a sponsor that conducts business in this manner."
Air Canada declined to comment beyond a terse statement acknowledging the bid had been received. Neither Cerberus nor Air Canada released details of the new offer.
Ernst & Young is expected to make a recommendation, on whether the revised offer should be considered, to the judge in charge of the restructuring. "This [offer] looks like it has got to be given serious consideration," said a source close to the restructuring.
Air Canada filed for bankruptcy protection on April 1, with almost C$13bn of debts.
The airline has hinted that Mr Li's offer was favoured partly because it was simpler in structure than Cerberus's initial approach. Mr Li holds Canadian citizenship and is not subject to the rules restricting any non-Canadian investor in the airline to 25 per cent of the voting equity.
Cerberus would probably have to overcome that restriction through some form of dual share structure.
However, one aspect of Mr Li's proposal had angered Air Canada's unions. It provides for chief executive Robert Milton and chief restructuring officer Calin Rovinescu to each receive 1 per cent of the new equity in stages over four years.        By Ken Warn in Toronto    FINANCIAL TIMES Nov 22, 2003
AIR CANADA BOARD OF DIRECTORS SELECTS VICTOR T.K. LI FOR INVESTMENT OF $650 MILLION AS EQUITY PLAN SPONSOR 

TOTAL NEW EQUITY OF $1.1 BILLION TO BE RAISED INCLUDING $450 MILLION RIGHTS OFFERING

Air Canada's Board of Directors at a meeting today selected Trinity Time Investments, controlled by Victor T.K. Li, from the two equity plan sponsor finalists. The Agreement contemplates a $650 million equity investment, which will represent approximately 31% of the common equity in a restructured Air Canada.

As previously announced, rights will be offered to all creditors of Air Canada to acquire new shares on the same economic terms as Trinity. The Rights Offering, in an amount of $450 million, will close contemporaneously with the Trinity Investment and will be underwritten by Deutsche Bank as standby purchaser. Rights not purchased by creditors will be purchased by Deutsche Bank at a premium determined in accordance with a formula not to exceed 15%, to benefit non-exercising creditors.

Between the Trinity Investment and the Rights Offering, an additional $100 million is being raised over the previously announced $1 billion which would avoid having to issue certain convertible debt instruments on emergence.

The Agreement contemplates that creditors with aggregate claims of $8-$10 billion will receive approximately 56% of the common equity, after taking into account the Rights Offering. Existing shareholders of Air Canada will receive in the aggregate a nominal .01% stake.

“I am extremely pleased that we received two firm investment commitments from leading international investors at this difficult time in the history of the airline industry," said Robert Milton, President & Chief Executive Officer of Air Canada. " Both offers valued the company in a similar fashion and both supported the company’s restructuring business plan and its management. Given the success of Victor Li in his global business endeavors, we look forward to the opportunity to benefit from his participation in fully realizing Air Canada’s true potential.”

“We are very excited to have been selected as equity plan sponsor to work with Air Canada to complete its restructuring," said Frank J. Sixt, speaking on behalf of Mr. Li and Trinity." We believe Air Canada is a solid platform and can successfully emerge from the current process as an industry leader in terms of service standards as well as in terms of profitability and growth. We have full confidence in the company's senior management team, and will continue to work with them over the coming months to complete the steps which will reshape Air Canada into a leading competitor in the air transportation sector globally."
The Agreement is subject to a number of conditions including: (i) satisfactory resolution of the funding of the pension deficit; (ii) the obtaining of regulatory approvals and understandings; (iii) the entering into of satisfactory agreements to acquire and finance the 70-110 seat aircraft acquisition program; (iv) approval of the Plan by Creditors and the Court; and, (v) the absence of various facts and events that would depreciate equity value. The Agreement provides for a closing date of no later than April 30, 2004.
Under the Agreement, Air Canada’s Board upon emergence will consist of 11 members of whom five will be designated by Trinity, two by Deutsche Bank, two members of management and two others by a selection committee which will include a representative of creditors.

Upon closing, base salary and bonus programs for continuing executives is to be no higher than currently in effect. A management stock option program will be established of up to 5% of total issued and outstanding shares, of which no more than 3% shall be issued on emergence at an exercise price equal to Trinity’s buy-in price. As was the case in both offers, so as to ensure the continued long term commitment of Robert Milton, President and CEO and Calin Rovinescu, Executive Vice President to implement Air Canada’s Business Plan, Trinity will provide these senior officers from its own holdings with 1% each of new equity vesting in stages over four years. This ownership interest will come from Trinity’s equity stake following emergence.

Trinity has required various transaction protection provisions. Air Canada has agreed not to solicit any competing proposals for an equity plan sponsor. Under certain circumstances up to $19.5 million may be payable as a “break fee”. In addition, Air Canada has agreed to pay Trinity certain closing fees and to reimburse Trinity for certain expenses until closing.
Air Canada anticipates seeking Court approval for the Agreement and for the Rights Offering and will seek Court direction for convening the requisite meeting of stakeholders in the near future. Periodic reports as to this process will be provided in the ordinary course.

The Investment will be funded from Mr. Li's personal financial resources and may include investment from other family holdings and foundations and is not subject to financing conditions. Mr. Victor T.K. Li, a Canadian citizen, is the Deputy Chairman of Cheung Kong (Holdings) Limited. Mr. Li and his family hold controlling interests in Cheung Kong as well as such other widely held companies as Hutchison Whampoa Limited, Hongkong Electric Holdings Limited and Husky Energy Inc. of Calgary. The Cheung Kong Group's businesses encompass such diverse areas as property development and investment, real estate agency and estate management, hotels, telecommunications and e-commerce, finance and investment, retail and manufacturing, ports and related services, energy, infrastructure projects and materials, media, and biotechnology. The Cheung Kong Group ranks among the top 100 corporations in the world, with businesses in close to 40 countries and over 165,000 employees.

Air Canada is proceeding with other components of its restructuring concurrent with the final stage of the equity sponsorship process and will continue to report progress from time to time.  - Employee Bulletin

Hong Kong Family Helps Air Canada Rescue

MONTREAL/HONG KONG (Reuters) - Air Canada  has turned to a group led by Hong Kong-based businessman Victor T.K. Li for C$650 million ($485 million) of new equity the insolvent airline will use to fund its emergence from bankruptcy protection.
Air Canada, the dominant carrier in Canada and world No. 11, said late on Saturday that it had chosen Li, the son of Asia's richest tycoon Li Ka-shing, for the equity infusion over New York-based Cerberus Capital Management.
The deal would mark the Li family's first major foray into the airline industry and its second big holding in Canada, where Li Ka-shing controls Husky Energy Inc , the country's No. 5 oil producer and refiner.
Both Victor Li and his brother Richard Li, who heads Hong Kong phone company PCCW Ltd (0008.HK)  , are citizens of Canada, a popular destination for people leaving Hong Kong.
From 1983 to 1998, the year after Britain handed over control of the territory to China, roughly 300,000 Hong Kong residents migrated to Canada.
Air Canada has been under bankruptcy protection since April 1, as it seeks to restructure some C$13 billion of debt and obligations. Under the agreement with Li, made through Trinity Time Investments, a company he controls, Li will hold 31 percent of the equity in a restructured version of the airline.
Creditors with claims of C$8 billion to C$10 billion would end up with about 56 percent of the equity in the restructured Montreal-based airline.
Existing shareholders will receive a nominal 0.01 percent stake, Air Canada said, an indication their common shares in the airline are practically worthless.
Air Canada shares closed at C$1.08, down six Canadian cents, or 5.3 percent, on the Toronto Stock Exchange on Friday. The stock's 52-week high was C$6.29, but the shares plunged when Air Canada said it was insolvent and wilted further on warnings from the airline that they would be worthless after its restructuring.
EQUITY INJECTION
The airline said the amount invested by Li would be part of C$1.1 billion of new equity that would include a C$450 million rights offering underwritten by Deutsche Bank  .
Li is deputy chairman of property group Cheung Kong (Holdings) Ltd (0001.HK) . Other widely held firms controlled by Li Ka-shing include ports-to-telecoms conglomerate Hutchison Whampoa Ltd (0013.HK) , Hongkong Electric Holdings Ltd (0006.HK) , online travel service Priceline.com, and Husky."We have full confidence in the company's senior management team, and will continue to work with them over the coming months to complete the steps that will reshape Air Canada into a leading competitor in the air transportation sector globally," Frank Sixt, a representative for Li, said in a statement.
To keep senior management on board, Trinity will provide Robert Milton, Air Canada's president and chief executive, and Calin Rovinescu, the airline's restructuring chief, with one percent each of new equity in the restructured airline from its own holdings, vesting in stages over four years.
Air Canada slipped into bankruptcy protection in April, buffeted by the long downturn in air travel and burdened by too much debt taken on three years earlier when it took over insolvent rival Canadian Airlines.
Under its restructuring, Air Canada has garnered C$1.1 billion of concessions from its unions, put in place a plan to cut 10,000 jobs from its work force of 40,000, and cut back its fleet and flight schedule.
Saturday's agreement, which must close by April 30, 2004, is subject to a number of conditions, including resolving the funding of Air Canada's C$1.5 billion pension deficit, obtaining regulatory approvals and reaching an agreement to finance the acquisition of new 70- to 100-seat aircraft, Air Canada said.         -    REUTERS   10 Nov 2003
Li sticks to family script with Air Canada stake
CALGARY, Alberta, Nov 10 (Reuters) - Victor Li is sticking to his father's script with his investment in Air Canada (AC.TO:) , one of seeking out firms that have fallen from grace but have hidden jewels to mine, analysts said on Monday.
The eldest son of Li Ka-shing, Asia's wealthiest tycoon, was chosen by the insolvent airline's board to inject C$650 million ($495 million) in equity in exchange for a 31 percent stake in the company when its restructuring is completed.
It is the Li family's first foray into airlines. It is known for holdings in a raft of other businesses worldwide, from real estate to ports to telecommunications to energy.
Victor, like his younger brother Richard Li, has Canadian citizenship and among his posts is co-chairman of Calgary-based Husky Energy Inc. (HSE.TO) , itself a struggling company when his father first gained a stake in the late 1980s.
"The history of investing in bankrupt airlines has actually been pretty favorable," said Cameron Doerksen, an airline analyst with Dlouhy Merchant Group. "With the investment, they get an asset for a pretty cheap price and they get sort of a clean slate to work with."
Air Canada, which has been under bankruptcy protection since April 1, is trying to restructure nearly C$13 billion of debt while facing heavy domestic competition from low-fare carriers, notably WestJet Airlines Ltd. (WJA.TO) .
But it remains the country's flag carrier internationally and one of its jewels is its presence in the Canada-Asia travel market, a position bolstered when it bought ill-fated competitor Canadian Airlines in 2000.
Victor Li's firm, Trinity Time Investments, beat out New York-based Cerberus Capital Management to make the infusion, and joins Deutsche Bank, which is underwriting a C$450 million rights offering, to inject more capital into what is expected to be a leaner carrier with less emphasis on domestic travel.
"Mr. Li brings a number of parts to the deal that Cerberus never could have, not the least of which is his Canadian citizenship, which neatly steps around the 25 percent (foreign) ownership rules," said airline consultant Rick Erickson.
He is also no stranger to Ottawa and stands to win "brownie points" by saving the federal government, which privatized Air Canada in 1988, the embarrassment of watching it descend into oblivion, although the odds of that are slim, Erickson said.
"Over the course of the (Li family's) business dealings in in Canada, they have come to know who some of the political players are and they know how to make things happen," he said.
The investment in integrated oil firm Husky is an example of patient money paying off, analysts said.Husky had a dominant position in heavy crude oil production, but less than stellar results. Li Ka-shing bought out the rest of the company in the early 1990s and in 2000 took it public through a reverse takeover of Renaissance Energy.
Since then, Husky has begun lucrative exploration and production in the South China Sea and this summer paid a special dividend that stuffed coffers of Hutchison Whampoa Ltd. (0013.HK) and other Li family holdings with C$300 million.
Despite years of speculation that Husky was on the block -- at least two potential suitors pored over the books -- the Lis remain front and center with a 72 percent interest.
"They're getting a good segue into China. They're using the connections that they have to get into some interesting markets and they got some pretty big projects coming," said analyst William Lacey of FirstEnergy Capital Corp.
The relationship with China, fostered by Li Ka-shing, could pay off for Air Canada with new routes in the burgeoning and potentially huge travel market, Erickson said.  -  REUTERS     10 Nov 2003
Air Canada shares surge despite new equity plan 

MONTREAL, Nov 10 (Reuters) - Air Canada (AC.TO) shares surged 10 percent on Monday despite the airline's announcement at the weekend that existing shareholders will retain only a nominal equity value in a restructured version of the airline.
Air Canada shares rose 11 Canadian cents to C$1.19 on the Toronto Stock Exchange shortly after the opening.
"I would have expected it to drop. This doesn't make any sense to me," said Nadi Tadros, analyst at Desjardins Securities.
Late on Saturday, the company said existing shareholders will receive a nominal 0.01 percent stake in a restructured Air Canada.
The airline said Hong Kong-based businessman Victor T.K. Li agreed to invest C$650 million ($485 million) of new equity the insolvent airline will use to fund its emergence from bankruptcy protection.
Through Trinity Time Investments, a company he controls, Li will hold 31 percent of the equity in a restructured version of the airline. Creditors with total claims of C$8 billion to C$10 billion would end up with about 56 percent of the equity in the restructured Montreal-based airline.
The 52-week high for Air Canada shares was C$6.29, but the shares plunged when Air Canada obtained court protection from creditors on April 1 and wilted further on warnings from the airline that they would be worthless after its restructuring.
The stock hit a low of 69 Canadian cents soon after the airline filed for bankruptcy.   - REUTERS   10 Nov 2003
Air Canada taps Hong Kong's Victor Li for equity

MONTREAL, Nov 9 (Reuters) - Air Canada (AC.TO) has turned to a group led by Hong Kong-based businessman Victor T.K. Li for C$650 million ($485 million) of new equity the insolvent airline will use to fund its emergence from bankruptcy protection.
Air Canada, the dominant carrier in Canada and world No. 11, said late on Saturday that it had chosen Li, the son of Hong Kong tycoon Li Ka-Shing, for the equity infusion over New York-based Cerberus Capital Management.
Air Canada has been under bankruptcy protection since April 1, as it seeks to restructure some C$13 billion of debt and obligations. Under the agreement with Li, made through Trinity Time Investments, a company he controls, Li will hold 31 percent of the equity in a restructured version of the airline.
Creditors with total claims of C$8 billion to C$10 billion would end up with about 56 percent of the equity in the restructured Montreal-based airline.
Existing shareholders will receive a nominal 0.01 percent stake, Air Canada said, an indication their common shares in the airline are in practical terms worthless.
Air Canada shares closed at C$1.08, down 6 Canadian cents, or 5.3 percent, on the Toronto Stock Exchange on Friday. The stock's 52-week high was C$6.29, but the shares plunged when Air Canada said it was insolvent and wilted further on warnings from the airline that they would be worthless after its restructuring.
The airline said the amount invested by Li, who is a Canadian citizen, would be part of C$1.1 billion of new equity that would include a C$450 million rights offering underwritten by Deutsche Bank .
Li is the deputy chairman of Cheung Kong (Holdings) Ltd. (0001.HK) . Li and his family have controlling interests in Cheung Kong and other widely held companies such as Hutchison Whampoa Ltd. (0013.HK) , Hongkong Electric Holdings Ltd. (0006.HK) and Calgary-based Husky Energy Inc. (HSE.TO:) .
"We have full confidence in the company's senior management team, and will continue to work with them over the coming months to complete the steps which will reshape Air Canada into a leading competitor in the air transportation sector globally," Frank Sixt, a representative for Li, said in a statement.
To keep senior management on board, Trinity will provide Robert Milton, Air Canada's president and chief executive, and Calin Rovinescu, the airline's restructuring chief, with 1 percent each of new equity in the restructured airline from its own holdings, vesting in stages over four years.
Air Canada slipped into bankruptcy protection in April, buffeted by the long downturn in air travel and burdened by too much debt taken on three years earlier when it took over insolvent rival Canadian Airlines.Under its restructuring, Air Canada has already garnered C$1.1 billion of concessions from its unions, put in place a plan to cut 10,000 jobs from its work force of 40,000, and cut back its fleet and flight schedule.
Saturday's agreement, which must close by April 30, 2004, is subject to a number of conditions, including resolving the funding of Air Canada's C$1.5 billion pension deficit, obtaining regulatory approvals and reaching an agreement to finance the acquisition of new 70- to 100-seat aircraft, Air Canada said.
The Canadian Auto Workers union, which represents thousands of ticket agents and call-center employees at Air Canada, said the pension plan deficit issue remains a hurdle to any agreement on new equity partners for the carrier.
"We have to finish the deal on the pension plan," Gary Fane, head of the transport sector division at the big union, told Reuters.
The union wants Air Canada to pay down the pension plan deficit faster over the 10-year period than the airline agreed to with Canadian regulators. Union leaders are to meet mid-week to discuss strategy on the pension talks.   - REUTERS      9 Nov 2003
The Hong Kong businessman Victor Li has acquired a 31 percent stake in Air Canada for 650 million Canadian dollars, or $486 million, providing the airline with an investment it needs to emerge from bankruptcy protection.Trinity Time Investments, a private company controlled by Li, was chosen to invest in a 31 percent stake in Canada's largest airline, Montreal-based Air Canada said Sunday. Li fended off a rival bid by the New York investment firm Cerberus Capital Management. He plans to fund the purchase personally or from family holdings.
The deal marks the Li family's entry into the aviation business. Li's father, the tycoon Li Ka-shing, owns the world's biggest port operator and invests in telecommunications, property and supermarkets worldwide. Air Canada has accumulated losses of 2.6 billion dollars in the past three and a half years.
Air Canada's chief executive, Robert Milton, cited "the success of Victor Li in his global business endeavor" for choosing him as its investor.

Air Canada, weighed down by debt and aircraft leases of more than 12 billion dollars, filed for bankruptcy protection on April 1. Creditors with claims of as much as 10 billion dollars will receive a combined stake of about 56 percent in the reorganized airline, Air Canada said. Existing shareholders will get a combined stake of about 0.01 percent.Air Canada declined to give more details on Trinity's investments. Cheung Kong Holdings, of which Victor Li is managing director, also declined to comment further.
Air Canada was the third of North America's 10 biggest carriers to seek bankruptcy protection as demand for travel suffered from an economic slowdown, war in Iraq the outbreak of severe acute respiratory syndrome.The carrier, its five main unions, Canadian pension regulators and company retirees have been trying to negotiate an agreement to close a 1.5 billion dollar shortfall in the pension plan.
As a Canadian citizen, Victor Li is not bound by Canada's rules on investment in local companies, which limit foreign ownership to 25 percent. The Canadian government has said it would not change the rule to smooth Air Canada's emergence from bankruptcy protection.
Air Canada will at the same time offer 450 million dollars of shares to its creditors. Deutsche Bank will help Air Canada underwrite the offer, the airline said.
The carrier has arranged 600 million dollars in debt financing with General Electric Capital Aviation Services, a unit of General Electric. The agreement includes a provision for Air Canada to borrow a maximum of $950 million for the purchase of as many as 43 smaller and more fuel-efficient jets to upgrade its fleet.
Air Canada, which has 336 planes and 31,000 employees, plans to exit from court protection by the end of this year.

Milton and the executive vice president Calin Rovinescu will each receive 1 percent of Air Canada over four years, the airline said. Their stakes will come from Trinity's holdings after Air Canada emerges from bankruptcy.
Trinity will appoint five out of the 11 directors on Air Canada's board.
Other investments by the Li family in so-called distressed assets include Husky Oil, which Li Ka-shing acquired in 1987 and merged with a rival in 2000, and the online travel agency Priceline.com in 2001.   -  IHT  BLOOMBERG     10 Nov 2003
Li Family's Air Canada Bid Fits Its Taste for Distressed Assets

A bid by Li Ka-shing's family for Air Canada reminds former Husky Energy Inc. Chief Operating Officer James Blair of when the Hong Kong billionaire took over the Canadian oil company 16 years ago: Li was entering an unfamiliar industry to buy a distressed company.
``Husky was under some duress at the time,'' Blair said in an interview. Canada's largest airline, seeking to exit bankruptcy, expects to get binding offers for as much as 60 percent of the company from the Li family and New York's Cerberus Capital Management LP next week. It plans to pick a winner the following week.
The bid to become Air Canada's largest shareholder, Blair said, fits Li's strategy of looking for businesses that have fallen into disfavor and holding them long enough to turn a profit when other investors take an interest. Calgary-based Husky's shares have gained 65 percent since Li created it by merging Husky Oil Ltd. with a publicly traded rival in 2000.
Li's eldest son, Victor, a Canadian citizen, is competing with Cerberus to invest at least C$700 million ($535 million) in the Montreal-based airline. Victor is deputy chairman of Cheung Kong Holdings Ltd., Hong Kong's biggest property developer.
Li Ka-shing's other bids for so-called distressed assets in the past two years have included his purchase in 2001 of online travel agency Priceline.com Inc. and a failed offer for Global Crossing Ltd., the bankrupt owner of a fiber-optic network.
SG Asset Management Ltd.'s Winson Fong said Li may be seeking investments that will pay off as the U.S. economy recovers from its slowest two years of growth in more than a decade, lifting the rest of North America with it.
Time to Buy
Yesterday, the U.S. reported a 7.2 percent surge in third- quarter gross domestic product, the fastest three-month expansion in almost 20 years.
``Right now is the time to buy more assets and gear up,'' said Fong, who helps manage $2 billion at SG, including shares in Cheung Kong and Li Ka-shing's Hutchison Whampoa Ltd. ``Maybe the airline is worth more than what they're paying now, assuming the U.S. recovers in the next year.''
Air Canada, which the Canadian government sold to the public in 1988, has indicated that the winning investor will get a stake of 35 percent to 60 percent. The airline, with a fleet of 336 planes and 31,000 employees, has been under court protection from creditors since April 1. It has more than C$12 billion of debt and other obligations.
Cerberus declined to comment on its bid. Goldman Sachs Group Inc., which is advising the Li family, won't comment, said Edward Naylor, the New York-based firm's spokesman in Asia. Victor Li, 39, declined an interview request.
The Li family's interest in Canada goes back at least two decades. In 1987, Li Ka-shing himself and through Hutchison bought a 52 percent stake in Husky Oil from Canada's Nova Corp. He bought out Nova's stake in 1991, then merged Husky with Renaissance Energy Ltd. in 2000.
Discipline
Li Ka-shing now holds 36.5 percent of Husky directly and Hutchison owns 35 percent. He took control of Toronto investment bank Gordon Capital in March 1996, after an internal fraud, and sold it to HSBC Holdings Plc in September 1999. PetroChina Co., China's top oil producer, last year backed away from a plan to buy Husky, saying the price Hutchison wanted was too high.
``They're very strong, disciplined people who don't do things half-heartedly,'' said Blair, who recalled that Husky under Li became rigorous in screening advisers and painstaking in its due diligence. ``They're patient and strategic investors.''
Husky, whose vice chairman is Victor Li, has resisted pressure to keep up with rivals and expand its Lloydminster, Saskatchewan, heavy-oil processing operation, avoiding the cost overruns that plagued Suncor Energy Inc., Syncrude Canada Ltd. and Shell Canada Ltd. Third-quarter profit rose 40 percent as it benefited from surging gas prices.
Li's Edge

Li Ka-shing bought a fifth of Priceline.com in February 2001 and has increased his stake to 65 percent. That stock has risen about two thirds since and reported net income in five of nine quarters. Forbes magazine ranks Li 28th on its list of the world's wealthiest people, with a fortune of $7.8 billion.
Blair, who left Husky to start his own company in 2002, said the Li family may have an advantage over Cerberus by virtue of Victor Li's Canadian citizenship. Canadian law prohibits a foreign investor from owning more than 25 percent of Air Canada and Cerberus may qualify as a bidder under Canada's foreign- ownership limits only because it has stakes in other Canadian companies.
``There's absolutely no doubt'' the federal government will pressure Air Canada to pick Li, said Garfield Emerson, chairman of Toronto law firm Fasken Martineau Dumoulin and former chief executive of N.M. Rothschild & Sons Ltd.'s Canadian unit. Cerberus may win should Li offer ``a lot less,'' he said.
Besting Billionaires
Victor Li's airline bid won't involve any of the family's publicly traded companies, such as Husky, Cheung Kong or Hutchison, his office said in a statement on Sept. 29. The Li Ka- shing Overseas Foundation, described in the statement as a charitable organization, may partly finance the bid, according to the statement.
Cerberus has tangled with billionaires before, and won. Earlier this year, it beat Warren Buffett's Berkshire Hathaway Inc. in the bidding for mobile-home lender Conseco Finance Inc., paying $1.37 billion together with three partners.
The private investment firm, named after the three-headed dog that guards the gates of Hell in Greek mythology, manages about $9 billion. Last year, it acquired Teleglobe Inc., the bankrupt Canadian operator of a fiber-optic network, from BCE Inc. together with a partner for $155 million.
Winning the bid would mark the Li family's entry into airline management. Airlines, Buffett said in May, are ``an incredibly tough business'' in which ``a great management will not necessarily get a great result.''
Sluggish Economy
Air Canada posted a second-quarter net loss of C$566 million, its ninth loss in eleven periods, after Toronto's SARS outbreak led travelers to shun the airline's hub and demand for seats worldwide fell with the outbreak of war in Iraq.
Canada's economy hasn't helped. After expanding the fastest of any member of the Group of Seven industrialized nations in 2002, it shrank for the first time in almost two years in the second quarter. The U.S., while reporting growth of 3.3 percent for the same period, has yet to replace 2.7 million jobs lost in the past two years.
Canada, which sends 85 percent of its exports to the U.S., stands to prosper from a growing American economy.
``It's a high-risk, high-return prospect,'' said Timothy Ross, UBS AG's airline analyst in Hong Kong.
`Superman' Tag
Li Ka-shing, who swept Hong Kong factory floors and sold plastic watch bands and belts as a Chinese refugee before making property investments in the late 1950s that would form the foundation for his fortune, is known as ``Superman'' in Asia for his record of timing investments for maximum return.
He made a $15 billion profit in 1999 selling 49 percent of Orange Plc, a British mobile-phone operator he started five years earlier. The next year, he turned a $9 billion profit on the sale of 23 percent of U.S. wireless operator VoiceStream Wireless Corp. and made $750 million selling 35 percent of a U.K. wireless- phone license to Japan's NTT DoCoMo Inc. and KPN NV of the Netherlands.
Should Li succeed in buying Air Canada, he might have to wait to find a buyer willing to take Air Canada off his hands. Unlike the mobile-phone industry, where demand for new services is growing, airlines are mature businesses. The 10 largest U.S. airlines have had losses of more than $20 billion since the start of 2001 because of a decline in business travel, the Sept. 11 terrorist attacks, the Iraq war and SARS.
``The first six to nine months out of a restructuring is the only time anyone has ever made any money as an equity investor in the airline industry,'' said Barry Allan, a founding partner of Marret Asset Management Inc. who oversees some Air Canada bonds. ``You'd be crazy to keep it as a core holding.''   - BLOOMBERG     10 Oct 2003
Editors' note:   Victor Li walked away from this deal in April 2004.
Points to note here:
Victor would have been ahead on this investment had it proceeded.   His father, Li Ka-Shing is still training his boys to carry on their dynastic fortune.   
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