CKI Becomes Largest Shareholder of
Australia's Largest Natural Gas Distributor

18 July, 1999 -- Hong Kong

Cheung Kong Infrastructure Holdings Limited (CKI) announced that it had entered into a subscription agreement to purchase a 19.97% interest in Envestra Limited (Envestra). This acquisition represents CKI's first investment in Australia as well as its debut in the natural gas business, marking two new milestones in the company's development.

Under the agreement, CKI will subscribe for 117.6 million new shares of Envestra at A$0.88 per share, representing a discount of 4.4% to Envestra's closing price of A$0.92 before transaction. The total consideration will be A$103.5 million (approximately HK$527.85 million). After closing of the subscription, CKI will hold a 19.97% stake in Envestra and become its largest shareholder along with Boral Limited. CKI will not have to make a general offer as the acquisition is below 20%, the maximum allowed without triggering a general offer.

Envestra is the largest natural gas distribution company in Australia. The gas networks operated by Envestra include 17,000 km of distribution networks and 500 km of transmission pipelines located in every mainland State, except Western Australia and the Australian Capital Territory. Envestra delivers around 100 petajoules of natural gas to 835,000 consumers each year. Approximately 97% of Envestra's consumers are stable domestic users, providing a stable source of cash flow for the company.

The Envestra acquisition is a high return investment. Not only does Envestra bear conventional utility company's characteristics of low risk and steady income, the way it is operated in Australia, Envestra brings to shareholders high cash yield and growth potential. This project has met all CKI's stringent requirements in investments - the high return makes it comparable to any of CKI's existing investments in Hong Kong and The Mainland.

Energy is one of CKI's three core businesses, and constitutes a major portion of CKI's profits. CKI has over 10 power stations located in Hong Kong and The Mainland, with a total installed capacity of 6,000 MW. Leveraging on the Group's extensive experience in energy production and distribution, this entry into the gas industry in Australia will be another platform for CKI to apply its expertise; it enhances CKI's energy portfolio and adds diversity to the Group.

Mr. H.L. Kam, Group Managing Director of CKI, said, "Natural gas is a business with great potential. It meets today's economic needs and is environmentally friendly. We are actively exploring investment opportunities in this industry, and will study channels to introduce natural gas into Hong Kong."

Mr. Kam continued, "The acquisition of Envestra marks a geographical expansion for CKI. While continuing to maintain our focus in Hong Kong and The Mainland, we will also look for projects with good development potential in other parts of the world. This investment in natural gas is one of CKI's initiatives in expanding beyond Hong Kong and The Mainland and is also the Cheung Kong Group's second investment in Australia following Hutchison's investment in telecommunications."

CKI, a constituent stock of the Hang Seng Index (ticker:1038), is the largest diversified infrastructure company in terms of market capitalisation in Hong Kong. The Group's three core businesses are infrastructure materials, energy, and transportation.

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