Lippo to sell HK property unit to China

Lippo to sell HK property unit to China

HONG KONG (AFP): Indonesian-owned Lippo Ltd. said yesterday it would sell 8.1 percent of its Hong Kong-listed property unit to a Chinese state-owned company for 583 million Hong Kong dollars (US$75 million).

Under the deal, Lippo's shareholding in Hong Kong China Ltd. will be reduced to 62 percent while the stake held by China Resources (Holdings) Co. Ltd. will rise to 9.6 percent, the company said.

Hong Kong China will be renamed Lippo China Resources Ltd. to reflect closer ties between the Indonesian-owned company and China Resources, the flagship of China's Ministry of Foreign Trade and Economic Cooperation.

The Lippo subsidiary used to be the Hong Kong-listed arm of Japanese property developer EIE, which has since collapsed.

Lippo's disposal is part of a group reorganization which will see a China Resources property affiliate, China Resources Enterprise Ltd., setting up a 50-50 venture with Lippo.

The joint venture will own 74.4 percent of HKCB Bank Holding Co. Ltd. which owns 50 percent of Hong Kong Chinese Bank Ltd., a commercial banker servicing small and medium-sized trading companies here.

China Resources last week acquired 50 percent of the bank for two billion Hong Kong dollars (258 million US).

China Resources chairman Zhu Youlan said yesterday China Resources Enterprise would ultimately hold 75 percent of Hongkong Chinese Bank, which it will rename China Resources Bank.

Lippo said the reorganisation would "enable Lippo and China Resources Group to build on their existing relationship and expand that relationship and cooperation into other areas of financial services.

"By becoming a direct partner with Lippo in the company controlling HKCB Bank Holding, CRE will participate in the broader range of financial services business, including securities and insurance, which are carried on by HKCB Bank Holding. It will enable HKCB Bank to consolidate the entire profits of Hongkong Chinese Bank Ltd," it said.