RPT-Fitch: Hutchison Rating Not Affected by Hong Kong Electric Spin-off
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Oct 3 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings said today that Hutchison Whampoa Limited's (Hutchison) Long-Term Issuer Default Rating of 'A-' with Stable Outlook is not affected by Power Assets Holdings' (PAH) plan to spin off Hong Kong Electric Company (HKE).
PAH said on 27 September 2013 that it planned to reduce its 100% shareholding in HKE to between 30%-49.9% through a spin-off and a separate listing of HKE. Hutchison has an indirect interest in PAH through its 76.4% stake in Cheung Kong Infrastructure Holdings Ltd (CKI; 'A-'/RWN), which in turn owns a 38.9% stake in PAH.
The impact on Hutchison is minimal as dividends from PAH accounted for only 4% of Hutchison's 2012 EBITDA (sum of subsidiaries' EBITDA and dividends received from associates and jointly-controlled entities).
The spin-off, if successful, would have a greater impact on CKI. Fitch on 30 September 2013 placed CKI's 'A-' rating on Rating Watch Negative as it believes the spin-off will weaken the quality of CKI's cashflows.
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