本文发表在 rolia.net 枫下论坛CALGARY, Alberta, Nov 10 (Reuters) - Victor Li is sticking to his father's script with his investment in Air Canada , one of seeking out firms that have fallen from grace but have hidden jewels to mine, analysts said on Monday.
The eldest son of Li Ka-shing, Asia's wealthiest tycoon, was chosen by the insolvent airline's board to inject C$650 million ($495 million) in equity in exchange for a 31 percent stake in the company when its restructuring is completed.
It is the Li family's first foray into airlines. It is known for holdings in a raft of other businesses worldwide, from real estate to ports to telecommunications to energy.
Victor, like his younger brother Richard Li, has Canadian citizenship and among his posts is co-chairman of Calgary-based Husky Energy Inc. , itself a struggling company when his father first gained a stake in the late 1980s.
"The history of investing in bankrupt airlines has actually been pretty favorable," said Cameron Doerksen, an airline analyst with Dlouhy Merchant Group. "With the investment, they get an asset for a pretty cheap price and they get sort of a clean slate to work with."
Air Canada, which has been under bankruptcy protection since April 1, is trying to restructure nearly C$13 billion of debt while facing heavy domestic competition from low-fare carriers, notably WestJet Airlines Ltd. .
But it remains the country's flag carrier internationally and one of its jewels is its presence in the Canada-Asia travel market, a position bolstered when it bought ill-fated competitor Canadian Airlines in 2000.
Victor Li's firm, Trinity Time Investments, beat out New York-based Cerberus Capital Management to make the infusion, and joins Deutsche Bank, which is underwriting a C$450 million rights offering, to inject more capital into what is expected to be a leaner carrier with less emphasis on domestic travel.
"Mr. Li brings a number of parts to the deal that Cerberus never could have, not the least of which is his Canadian citizenship, which neatly steps around the 25 percent (foreign) ownership rules," said airline consultant Rick Erickson.
He is also no stranger to Ottawa and stands to win "brownie points" by saving the federal government, which privatized Air Canada in 1988, the embarrassment of watching it descend into oblivion, although the odds of that are slim, Erickson said.
"Over the course of the (Li family's) business dealings in in Canada, they have come to know who some of the political players are and they know how to make things happen," he said.
The investment in integrated oil firm Husky is an example of patient money paying off, analysts said.
Husky had a dominant position in heavy crude oil production, but less than stellar results. Li Ka-shing bought out the rest of the company in the early 1990s and in 2000 took it public through a reverse takeover of Renaissance Energy.
Since then, Husky has begun lucrative exploration and production in the South China Sea and this summer paid a special dividend that stuffed coffers of Hutchison Whampoa Ltd. and other Li family holdings with C$300 million.
Despite years of speculation that Husky was on the block -- at least two potential suitors pored over the books -- the Lis remain front and center with a 72 percent interest.
"They're getting a good segue into China. They're using the connections that they have to get into some interesting markets and they got some pretty big projects coming," said analyst William Lacey of FirstEnergy Capital Corp.
The relationship with China, fostered by Li Ka-shing, could pay off for Air Canada with new routes in the burgeoning and potentially huge travel market, Erickson said.更多精彩文章及讨论,请光临枫下论坛 rolia.net
The eldest son of Li Ka-shing, Asia's wealthiest tycoon, was chosen by the insolvent airline's board to inject C$650 million ($495 million) in equity in exchange for a 31 percent stake in the company when its restructuring is completed.
It is the Li family's first foray into airlines. It is known for holdings in a raft of other businesses worldwide, from real estate to ports to telecommunications to energy.
Victor, like his younger brother Richard Li, has Canadian citizenship and among his posts is co-chairman of Calgary-based Husky Energy Inc. , itself a struggling company when his father first gained a stake in the late 1980s.
"The history of investing in bankrupt airlines has actually been pretty favorable," said Cameron Doerksen, an airline analyst with Dlouhy Merchant Group. "With the investment, they get an asset for a pretty cheap price and they get sort of a clean slate to work with."
Air Canada, which has been under bankruptcy protection since April 1, is trying to restructure nearly C$13 billion of debt while facing heavy domestic competition from low-fare carriers, notably WestJet Airlines Ltd. .
But it remains the country's flag carrier internationally and one of its jewels is its presence in the Canada-Asia travel market, a position bolstered when it bought ill-fated competitor Canadian Airlines in 2000.
Victor Li's firm, Trinity Time Investments, beat out New York-based Cerberus Capital Management to make the infusion, and joins Deutsche Bank, which is underwriting a C$450 million rights offering, to inject more capital into what is expected to be a leaner carrier with less emphasis on domestic travel.
"Mr. Li brings a number of parts to the deal that Cerberus never could have, not the least of which is his Canadian citizenship, which neatly steps around the 25 percent (foreign) ownership rules," said airline consultant Rick Erickson.
He is also no stranger to Ottawa and stands to win "brownie points" by saving the federal government, which privatized Air Canada in 1988, the embarrassment of watching it descend into oblivion, although the odds of that are slim, Erickson said.
"Over the course of the (Li family's) business dealings in in Canada, they have come to know who some of the political players are and they know how to make things happen," he said.
The investment in integrated oil firm Husky is an example of patient money paying off, analysts said.
Husky had a dominant position in heavy crude oil production, but less than stellar results. Li Ka-shing bought out the rest of the company in the early 1990s and in 2000 took it public through a reverse takeover of Renaissance Energy.
Since then, Husky has begun lucrative exploration and production in the South China Sea and this summer paid a special dividend that stuffed coffers of Hutchison Whampoa Ltd. and other Li family holdings with C$300 million.
Despite years of speculation that Husky was on the block -- at least two potential suitors pored over the books -- the Lis remain front and center with a 72 percent interest.
"They're getting a good segue into China. They're using the connections that they have to get into some interesting markets and they got some pretty big projects coming," said analyst William Lacey of FirstEnergy Capital Corp.
The relationship with China, fostered by Li Ka-shing, could pay off for Air Canada with new routes in the burgeoning and potentially huge travel market, Erickson said.更多精彩文章及讨论,请光临枫下论坛 rolia.net