Li consortium in £757m deal for natural gas network giant in Northern Ireland

A consortium formed by Li Ka-shing’s infrastructure and energy flagship, CK Infrastructure Holdings, property arm CK Asset Holdings, and international energy investment unit Power Assets Holdings is acquiring the largest natural gas network company in Northern Ireland, the CK Group said yesterday.

The consortium will acquire Lionrai Investments No 1, which owns 100 per cent of natural gas network company Phoenix Energy, from NatWest Group Pension Fund and Utilities Trust of Australia in a deal worth £757 million (HK$7.35 billion).

The transaction was expected to be completed soon, the group said.

CK Infrastructure and CK Asset each have a 40 per cent stake in the consortium, while Power Assets holds the rest.

“We are very happy to acquire another quality asset characterised by stable returns,” Victor Li Tzar-kuoi, Li’s elder son and chairman of CK Infrastructure and CK Asset, said in a statement.

Beginning operations in 1996, Phoenix Energy is one of three gas distribution network operators in Northern Ireland. Its network covers nearly half of the local population, including Greater Belfast, and 78 per cent of gas connections in Northern Ireland.

Lionrai reported a post-tax loss of £34.3 million in 2021 and £13.6 million in 2022, according to a CK Group exchange filing. It did not provide data for last year.

The deal, CK Infrastructure’s first acquisition in Europe since 2017, could provide stable cash flow, immediate yield and recurring profits to the group, it said.

CK Infrastructure, also founded in 1996, owns a global infrastructure portfolio that comprises primarily projects in Britain, Australia and New Zealand. The firm had HK$13 billion in cash on hand and a net-debt-to-net-totalcapital ratio of 7.7 per cent as of the end of last year.

Together with other CK Group units, CK Infrastructure has been on an asset shopping spree since the outbreak of the Covid-19 pandemic, taking advantage of low valuations to hunt for bargains with HK$18 billion in cash on hand at the time.

Li Ka-shing has taken a hit from a gloomy property sector and a sluggish trade landscape. According to Forbes magazine in February, Hong Kong’s 50 richest people saw their total wealth diminish by 9 per cent to US$296 billion last year, with Li, who tops the list, seeing his net worth shrink by 7 per cent to US$36.2 billion.