OREANDA-NEWS. October 20, 2011. Following an announcement made on 2 August 2011, UK Water (2011) Limited, a company formed by a consortium led by Cheung Kong Infrastructure Holdings Limited (“CKI”) has completed the acquisition of Northumbrian Water Group plc (“Northumbrian Water”).

The consortium’s members include CKI, Cheung Kong (Holdings) Limited and the Li Ka Shing Foundation Limited – their shareholdings are 40%, 40% and 20% respectively. The acquisition of Northumbrian Water was implemented by way of a court-sanctioned Scheme of Arrangement between Northumbrian Water and its shareholders. All conditions for the completion of the transaction have been fulfilled.

Shares of Northumbrian Water have been delisted from the London Stock Exchange on 14 October 2011.

Northumbrian Water Generated HKD 2.2 Billion Annual Profit
Mr. H L Kam, Group Managing Director of CKI, said, “We are very pleased about the acquisition of Northumbrian Water. This regulated business is poised to bring in strong and recurrent cash flow to CKI.”

“Northumbrian Water is a premium investment which provides CKI with immediate earnings,” Mr. Kam continued.

“Upon completion of the acquisition in October, CKI will book 2.5 months of profit contribution in the 2011 financial year,” Mr. Kam commented.

For the year ended 31 March 2011, Northumbrian Water reported GBP 178.3 million (approximately HKD 2.2 billion) in profits. A 40% shareholding would mean an earning of approximately GBP 71.3 million (approximately HKD 872.8 million) during that period.

“The acquisition of Northumbrian Water marks CKI’s second investment in the United Kingdom in 12 months. This transaction follows closely the purchase of the GBP 5.775 billion UK Power Networks which took place in October last year,” Mr. Kam said. “These two significant projects – Northumbrian Water and UK Power Networks, are expected to bring us to a new level in earnings,” Mr. Kam added.

“The successful acquisitions of Northumbrian Water and UK Power Networks reflect clearly the strength of our financial capacity and the capability of our team in sourcing and acquiring attractive infrastructure projects,” Mr. Kam expressed.

Currently, CKI has a comprehensive portfolio of investments which includes gas and electricity distribution, water and waste water services, as well as electricity generation in the United Kingdom. The size of CKI’s investments in the United Kingdom is about GBP 5.1 billion (approximately HKD 62.4 billion).

“With cash on hand of approximately HKD 4.2 billion, and a net debt to equity ratio of below 20% after this Northumbrian Water transaction, we will continue to seek good infrastructure projects in different sectors for further expansion,” Mr. Kam concluded.