8 September 1997
CLP to establish new holding
China Light & Power Company, Limited (CLP) today announced its intention to put to its shareholders a proposal to reorganise the Group under a new holding company (CLP Holdings) to be established in Hong Kong.
The reorganisation is intended to bring considerable benefits to the CLP Group. It will not result in any change for CLP's customers. CLP's Shareholders will maintain the same interest in the current business as they do now.
The proposal is in line with practices all over the world and in particular in Hong Kong, where many utility companies have established holding company structures to separate their regulated and non-regulated businesses.
Under the proposal, the listing of CLP Shares on the Stock Exchange will be withdrawn and CLP Holdings Shares will be listed in their place.
CLP Holdings will have two distinct streams of businesses: (1) the electricity business in Hong Kong which is governed by the Scheme of Control (SOC); (2) overseas projects and other businesses in Hong Kong not governed by the SOC.
The proposal is subject to a number of conditions including approval by shareholders at an Extraordinary General Meeting.
CLP Chairman The Hon. Michael D. Kadoorie says: " We are pleased to propose the reorganisation to our shareholders.
"As the growth of the Group's electricity business in Hong Kong slows down in the wake of the maturing economy, the new structure will provide greater flexibility for the development of businesses outside Hong Kong and enable investors and customers to better understand our SOC and non-SOC operations.
"I ' d like to assure our customers that the proposed arrangement does not change anything for them: there will be no impact on the tariff nor our long-standing commitment to provide reliable supplies of electricity at the lowest reasonable cost. Indeed, the clear delineation of our core business will help to ensure transparency and public accountability."
CLP Holdings will be incorporated in Hong Kong. The use of an overseas jurisdiction such as Bermuda was considered. This would have reduced capital duty and made the reorganisation simpler and quicker. However, given CLP's century long presence in Hong Kong and its status as a major electric utility, serving the public of Hong Kong, it was felt that it is important to demonstrate the company's continued commitment to Hong Kong by retaining domicile here in the SAR.
|Issued by : ||Sandra Mak, Public Affairs Manager|
Tel : 2678 8521
Pager : 7116 3131 a/c 7736
Katherine Ma, Assistant Public Affairs Manager
Tel : 2678 8524
Pager : 7116 3131 a/c 9774
|attachment||Proposed Group Reorganisation Announcement"