The Hong Kong and China Gas Company Limited

Infobox Company
company_name = The Hong Kong & China Gas Co Ltd.
company_
company_type = public hkse|0003,OTCBB|HOKCY
foundation = 1862
location = Hong Kong, China
key_people = Lee Shau Kee, "Chairman"
Alfred Chan, "General Manager"
industry = Public utility
products = Gas supply, Potable Water, Sewerage
revenue = HKD 9,351m (2005)
operating_income =
net_income = HKD 5,281m
num_employees = 1,901
parent =
homepage = [http://www.towngas.com www.towngas.com]
footnotes = 37.15% Associate of Henderson Land Development

The Hong Kong and China Gas Company Limited (zh-t|t=香港中華煤氣有限公司), commonly known as Towngas, is the monopoly provider of towngas in Hong Kong. Founded in 1862, it is one of the oldest listed companies in the territory.

It is the leading public utility in Hong Kong, and supplies towngas to 85% Hong Kong households, and also to commercial and industrial customers. It has several joint ventures in gas supply on the Mainland, where it has also started to enter into the businesses of supply of drinking water and waste water disposal. It also engages in property development projects, namely International Finance Centre (15% share), Grand Promenade (50% share) and Grand Waterfront, in Hong Kong with its largest shareholder.

According to official documents, Henderson Land Development Co. Ltd (HLD) is the company's largest shareholder, owning 37.15% of the share capital of the company as at 31 December 2005. The shares are held through HLD's listed subsidiary, Henderson Investment. Lee Shau Kee, chairman of Henderson, is also the chairman of the company. Of the company's 10 directors, three others are also directors or vice-chairmen of Henderson.

Usurpation by ultimate parent

On 3 October 2007, HLD proposed to pay market value only to gain control of Towngas. The 39.06 percent stake in TownGas held by subsidiary Henderson Investment was valued at HK$42.86 billion in cash and convertible notes for the purposes of the transaction. Minority shareholders of Henderson Investment, who together hold 30.73%, would receive 204.1 million Henderson Land shares and HK$1.19 billion in cash.

The offer was considered by analysts to be favourable to the Company, and shareholder activist David Webb criticised the deal saying Henderson was acquiring the stake on the cheap, without paying any control premium to minority shareholders of Henderson Investment. Webb further criticised the nature of the offer as a back-door privatisation of Henderson Investment, which would virtually be a shell company after the transfer of the stakecite news|title = Henderson makes $42.86b offer for Towngas control | first = Victor | last = Cheung |url= http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=54467&sid=15660537&con_type=1&d_str=20071004&sear_year=2007|publisher = The Standard | date = 4 October 2007 | accessdate = 2007-10-04 ] .

On 7 November, Henderson sweetened the offer to appease minority shareholders by increasing the cash portion to HK$2.24 per share, who threatened to vote down the proposal [Victor Cheung, [http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=56546&sid=16181196&con_type=1&d_str=20071109&sear_year=2007 "Henderson Land all set to take over Towngas"] , "The Standard", 09 November 2007] . On 7 December 2007, Henderson secured shareholders' support for the usurpation [Victor Cheung, [http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=58266&sid=16655998&con_type=1&d_str=20071208&sear_year=2007 Henderson Land gets control of Towngas] , "The Standard", 08 December 2007] .

Miscellaneous

On 11 April 2006, an explosion caused by leaking Towngas killed 2 people and injured 8 others [http://www.legco.gov.hk/yr05-06/english/panels/es/papers/es0522cb1-1498-3e.pdf] .

References

External links

* [http://www.towngas.com/ Official website]
* [http://www.zonaeuropa.com/20060412_1.htm EastSouthWestNorth: The Gas Explosion in Hong Kong]
* [http://www.hk-place.com/vp.php?board=1&id=2003-1 Explosion photos]