UBS has released a research report maintaining a "buy" rating for CKH HOLDINGS (00001) with a target price of HK$101.
According to the Australian Financial Review, CKH HOLDINGS' 76%-owned subsidiary, CKI HOLDINGS (01038), has mandated Morgan Stanley and Barclays to initiate the sale of its stake in EDL Energy, an Australian sustainable distributed energy producer. CKH HOLDINGS holds an effective 36% stake in EDL Energy, with the valuation estimated between A$2 billion and A$3 billion.
EDL Energy focuses on clean and renewable electricity, renewable natural gas, and remote renewable energy services, with major clients including Glencore and Rio Tinto. UBS estimates that proceeds from the transaction could represent 1.4% to 2.1% of CKH HOLDINGS' market capitalization. Assuming no gains or losses from the sale, if the deal is completed within the estimated valuation range, CKH HOLDINGS' net debt ratio could decrease by approximately 2 percentage points.
If successful, this would mark the third divestment of a jointly invested infrastructure project by the consortium comprising CKI HOLDINGS, Cheung Kong Property Holdings, and Power Assets Holdings, following the earlier sales this year of UK Power Networks and UK Rails.
Comments