Towngas plans long-term IPO for 'green' subsidiary
Energy business says it will consider listing for environmental firm when it contributes more than a third of total profits for the group
Hong Kong and China Gas, better known as Towngas, will consider spinning off its non-city gas businesses in a separately listed unit in the medium term to better reflect their value.
Towngas, the only distributor of piped gas in Hong Kong, might list ECO Environmental Investments when it reaches about 40 per cent of Towngas' total net profit, managing director Alfred Chan Wing-kin said.
ECO, set up in 2000, last year recorded a net profit of about HK$500 million, roughly 12 per cent of Towngas' net profit of HK$4.1 billion.
Chan said its contribution might rise to between 20 per cent and 25 per cent by 2016.
"A separate listing is possible when its contribution reaches a third to 40 per cent of total profit, but there is no such need at the moment and there is no timetable," he said.
Whether a separate listing would happen depended on its cost and benefit relative to alternative fundraising options such as a bond issue, which in turn was affected by a company's financial position and market conditions at the time, he added.
