The Hong Kong and China Gas Company Limited
Encyclopedia
It is the leading public utility
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...
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 China
Mainland China
Mainland China, the Chinese mainland or simply the mainland, is a geopolitical term that refers to the area under the jurisdiction of the People's Republic of China . According to the Taipei-based Mainland Affairs Council, the term excludes the PRC Special Administrative Regions of Hong Kong and...
, 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
International Finance Centre
The International Finance Centre is an integrated commercial development on the waterfront of Hong Kong's Central District....
(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
Lee Shau Kee
Lee Shau-kee GBM is a property developer and majority owner of Henderson Land Development , a property conglomerate with interests in properties, hotels, restaurants and internet services...
, 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.
History
In early 1862, the concession to supply gas to the city of Victoria (now referred to as CentralCentral, Hong Kong
Central is the central business district of Hong Kong. It is located in Central and Western District, on the north shore of Hong Kong Island, across Victoria Harbour from Tsim Sha Tsui, the southernmost point of Kowloon Peninsula...
), was obtained from then governor Sir Hercules Robinson
Hercules Robinson, 1st Baron Rosmead
Hercules George Robert Robinson, 1st Baron Rosmead, GCMG, PC was a British colonial administrator who became the 5th Governor of Hong Kong...
by William Glen, a newcomer to the gas industry. Incorporation took place on 31 May 1862 and by 3 December that year there were 15 miles (24.1 km) of pipes and 500 gas lamps along Queen's Road
Queen's Road
Queen's Road is the first road in Hong Kong built by the Government of Hong Kong between 1841 and 1843, spanning across Victoria City from Shek Tong Tsui to Wan Chai...
and Upper Valley Road. In Kowloon
Kowloon
Kowloon is an urban area in Hong Kong comprising the Kowloon Peninsula and New Kowloon. It is bordered by the Lei Yue Mun strait in the east, Mei Foo Sun Chuen and Stonecutter's Island in the west, Tate's Cairn and Lion Rock in the north, and Victoria Harbour in the south. It had a population of...
, residents continued to rely on candles and oil lamps until gas was laid on 28 years later. The company's original generating plant, the first in Asia, stood on the waterfront at West Point
West Point, Hong Kong
West Point was a point of land on Hong Kong Island, Hong Kong. Its location is the shore off the Pokfulam Road and Queen's Road West in 1845, approximately the junction of Western Street and Des Voeux Road West near the Western Police Station...
near Whitty Street
Whitty Street
Whitty Street is a street in Shek Tong Tsui, Hong Kong Island, Hong Kong. Named after R.C. Whitty, the first manager of the Hong Kong and China Gas Company, the street is well-known as one of seven terminals of the Hong Kong Tramway...
and provided gas for lighting to Jardine's
Jardine Matheson Holdings
Jardine Matheson Holdings Limited often referred to as Jardines, is a multinational corporation incorporated in Bermuda and based in Hong Kong. While listed on the London Stock Exchange and the Singapore Exchange, the vast majority of Jardines shares are traded in Singapore...
offices, the The Hong Kong Dispensary and the Hong Kong Hotel
Hong Kong Hotel
The Hongkong Hotel was Hong Kong's first luxury hotel, modelled after sumptuous London hotels. It was opened on Queen's Road and Pedder Street in 1868., and expanded onto the Victoria Harbour waterfront of Victoria City in 1893.-The hotel:...
. For 80 years the plant was coal fired and produced 120000 ft3 of gas per day. It was run directly from Britain until 1954 when a majority shareholding was purchased by local firm Wheelock and Marden Company Limited
Wheelock & Co
Wheelock and Company Limited is a Chinese financial real estate company based in Hong Kong. It was listed as #1249 on the Forbes 2000 list.The Group's principal activities are property investment, property development, property management and agency, and investment holding. The Group also involved...
who moved the company's registered domicile from the UK to Hong Kong.
As of 2011, the only surviving four gas lamps installed by the company are situated at the top and bottom of a flight of broad granite steps linking Ice House Street
Ice House Street
Ice House Street is a street in Central on Hong Kong Island, Hong Kong. The street starts from Lower Albert Road on a hill slope and runs downhill across Queen's Road Central, Des Voeux Road Central, Chater Road and ends in Connaught Road Central....
and Duddell Street
Duddell Street
Duddell Street is a street in Central, Hong Kong, bounded by Ice House Street and Queen's Road Central.This short street includes at its southern end a flight of granite steps, built between 1875 and 1889, leading to Ice House Street...
. These are still maintained by Towngas, while the site is one of the Declared monuments of Hong Kong
Declared monuments of Hong Kong
Declared monuments of Hong Kong are places, structures or buildings legally declared to be "protected". In Hong Kong, declaring a monument requires consulting the Antiquities Advisory Board, the approval of the Chief Executive as well as the publication of the notice in government gazette.As of 12...
.
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
David Michael Webb
David Michael Webb , usually known as David Webb, is a well-known activist and share market analyst in Hong Kong. He is a retired Investment Banker, and now devotes much of his time to advocating solutions for better corporate and economic governance in Hong Kong...
criticised the deal saying Henderson was acquiring the stake on the cheap, without paying any control premium
Control premium
Control premium is an amount that a buyer is usually willing to pay over the current market price of a publicly traded company. Contrary to a widely held view, this premium is not justified by the expected synergies, such as the expected increase in cash flow resulting from cost savings and revenue...
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 stake.
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. On 7 December 2007, Henderson secured shareholders' support for the usurpation.
Gas incident at Ngau Tau Kok
On 11 April 2006, an explosion caused by leaking towngas in Ngau Tau KokNgau Tau Kok
Ngau Tau Kok is an area of Kowloon, Hong Kong, located at the northern part of Kwun Tong District, next to Kowloon Bay. It covers Jordan Valley, Ngau Tau Kok and Upper Kwun Tong town centre. The population of Ngau Tau Kok exceeds 210,000...
killed two people and injured nine more.