Tycoon Li Ka-shing has sold the bulk of his stake in a port terminal, disposing of another asset in Hong Kong and raising fresh questions about his oft-repeated claim that he has confidence in the city and will not withdraw.
The port arm of Li's business empire, Hutchison Port Holdings Trust (HPHT), sold a 60 percent stake in Hong Kong Terminal 8 West for US$318.13 million to two mainland shipping conglomerates, reported the South China Morning Post.
The pair are Cosco Pacific, which acquired a 40 percent stake, and China Shipping Terminal Development, which bought a 20 percent share.
Gerry Yim, HPHT chief executive, said the deal would improve port operations in terms of flexibility, efficiencies, synergies and profitability.
Analysts digested the latest significant move by Li.
"Li has long lost confidence in the Hong Kong port business when he decided to spin off the operations of HPHT on the Singapore [stock] exchange in 2011," an industry analyst said. Others demurred, saying the move was consistent with a strategy under which he spun off his holdings in Hongkong Electric and considered selling ParknShop last year.
"The port business is still a cash cow but the ports in Hong Kong have turned mature and could register low growth," said Benjamin Lo, an analyst at Nomura International.
"The company is in the process of monetising low-growth assets which have good valuations when the interest rate environment is favourable and to deleverage the balance sheet ahead of an upcycle in the interest rate."
Hong Kong port has been overtaken by Shenzhen as the world's third busiest container terminal. The city's dock strike last year prompted shipping lines to divert cargoes to Shenzhen and most have not returned.
Li, Asia's richest man, gave a downbeat assessment of Hong Kong last month, warning that the Occupy Central campaign, the harassment of mainland tourists and declining competitiveness with neighbouring markets would erode the city's prospects. But in November he had dismissed suggestions that he was pulling out of the city as a "big joke".
The sale of the terminal stake came a year after HPHT acquired the entire holding of Asia Container Terminals, the operator of T8 West, from DP World.
Talks between HPHT and Cosco Pacific began in June after operations in Li's Hong Kong International Terminals were paralysed by the 40-day strike that ended on May 6. The dispute became so bitter that striking dock workers placed a demon-like effigy of Li in front of the Cheung Kong building, the headquarters of his flagship company.
After selling the 60 percent stake in T8 West, HPHT will continue running the T4, T6,T7 and T9 terminals in Hong Kong.
HPHT saw its earnings sink 25 percent year-on-year in 2013 to $215 million as the volume of business at its Hong Kong port operations declined 12.4 percent.
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