Everything about The Hong Kong And China Gas Company Limited totally explained
The Hong Kong and China Gas Company Limited, commonly known as
Towngas, is the
monopoly provider of
towngas in
Hong Kong. Founded in
1862, it's one of the oldest listed companies in the territory.
It is the leading
public utility in Hong Kong, and supplies towngas to 85% Hong Kong households, and also to commercial and industrial customers. It has several
joint ventures in gas supply on the
Mainland, where it has also started to enter into the businesses of supply of drinking water and waste water disposal. It also engages in property development projects, namely
International Finance Centre (15% share), Grand Promenade (50% share) and Grand Waterfront, in Hong Kong with its largest shareholder.
According to official documents,
Henderson Land Development Co. Ltd (HLD) is the company's largest shareholder, owning 37.15% of the share capital of the company as at
2005-12-31. The shares are held through HLD's listed subsidiary, Henderson Investment.
Lee Shau Kee, chairman of Henderson, is also the chairman of the company. Of the company's 10 directors, three others are also directors or vice-chairmen of Henderson.
Usurpation by ultimate parent
On October 3, 2007, HLD proposed to pay market value only to gain control of Towngas. The 39.06 percent stake in TownGas held by subsidiary Henderson Investment was valued at HK$42.86 billion in cash and convertible notes for the purposes of the transaction. Minority shareholders of Henderson Investment, who together hold 30.73%, would receive 204.1 million Henderson Land shares and HK$1.19 billion in cash.
The offer was considered by analysts to be favourable to the Company, and shareholder activist
David Webb criticised the deal saying Henderson was acquiring the stake on the cheap, without paying any
control premium to minority shareholders of Henderson Investment. Webb further criticised the nature of the offer as a back-door privatisation of Henderson Investment, which would virtually be a
shell company after the transfer of the stake.
On November 7, Henderson sweetened the offer to appease minority shareholders by increasing the cash portion to HK$2.24 per share, who threatened to vote down the proposal. On December 7, 2007, Henderson secured shareholders' support for the usurpation.
Miscellaneous
On 11 April 2006, an explosion caused by leaking Towngas killed 2 people and injured 8 others
(External Link
).
Further Information
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