Power Assets Holdings Limited - Proxy Solicitation & Information Statement 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in Hongkong Electric Holdings Limited , you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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�� Hongkong Electric Holdings Ltd.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 0006)

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 5 to 12 of this circular and a letter from the Independent Board Committee is set out on page 13 of this circular.

The text of a letter of advice from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 14 to 25 of this circular.

The Resolution will be proposed at the EGM to be held at the Ballroom, 1st Floor, Harbour Plaza Hong Kong, 20 Tak Fung Street, Hung Hom, Kowloon, Hong Kong on Monday, 23rd June, 2008 at 10:30 a.m. to approve the matters referred to in this circular.

The notice dated 6th June, 2008 convening the EGM is set out on pages 38 to 39 of this circular.

Whether or not you are able to attend the EGM or any adjourned meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed on it and return it to the registered office of the Company, 44 Kennedy Road, Hong Kong no later than 48 hours before the time for holding the EGM or any adjournment thereof. Completion and return of the enclosed form of proxy will not preclude you from attending and voting in person at the EGM or at any adjourned meeting should you so wish.

6th June, 2008

CONTENT

	Page
Definitions..................................................................................................................................	1
Letter from the Board ............................................................................................................	5
Letter from the Independent Board Committee................................................................	13
Letter from BNP Paribas Capital.........................................................................................	14
Appendix — General Information........................................................................................	26
Notice of Extraordinary General Meeting..........................................................................	38

— i —

DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

“Acquisition”	has the meaning ascribed to it in the CKI Announcement
“AdvanCo”	a company or body corporate established or to be established
	by CKI and the Company and owned or to be owned by CKI
	and the Company on a 50/50 basis
“Agreement”	a conditional sale and purchase agreement dated 16th May,
	2008 entered into between CKI and the Company in respect of
	the Transaction
“associate(s)”,	have the meanings ascribed to them under the Listing Rules
“connected person(s)” and
“controlling shareholder(s)”
“Associated Corporations”	has the meaning ascribed to it under Part XV of the SFO
“BNP Paribas Capital”	BNP Paribas Capital (Asia Pacific) Limited, a licensed
	corporation for Types 1 (dealing in securities) and 6 (advising
	on corporate finance) regulated activities under the SFO
“Board”	the board of Directors
“Business Day”	any day on which banks are open in Hong Kong for general
	banking business, other than Saturdays, Sundays and days on
	which a Tropical Cyclone Warning No. 8 or above or a “Black
	Rainstorm Warning Signal” is hoisted in Hong Kong at any
	time between 9 am and 5 pm
“CKI”	Cheung Kong Infrastructure Holdings Limited, a company
	incorporated in Bermuda with limited liability, the shares of
	which are listed on the Main Board of the Stock Exchange
	(Stock Code: 1038)
“CKI Announcement”	an announcement dated 28th April, 2008 issued by CKI in
	relation to the acquisition of the entire issued share capital of
	VWE Network by WEDN under the Sale and Purchase
	Agreement
“CKI Group”	CKI and its subsidiaries

— 1 —

DEFINITIONS

“Company”	Hongkong Electric Holdings Limited, a company incorporated
	in Hong Kong with limited liability, the shares of which
	are listed on the Main Board of the Stock Exchange
	(Stock Code: 0006)
“Completion”	completion of the Transaction in accordance with the terms of
	the Agreement
“connected person”	has the meaning ascribed to it in the Listing Rules
“Directors”	the directors of the Company
“EGM”	the extraordinary general meeting of the Company to be held
	to approve the acquisition by the Company of the Sale Shares
	and other transactions and matters as contemplated under the
	Agreement
“Facility”	the facility in the amount of up to NZ$400 million
	(approximately HK$2,381.5 million) to be provided by certain
	bank or banks to WEDN
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“HoldCo”	Wellington Electricity Distribution Network Holdings Limited,
	a company incorporated under the laws of Bahamas with limited
	liability and an indirect wholly-owned subsidiary of CKI
“Hong Kong”	Hong Kong Special Administrative Region of the People’s
	Republic of China
“Independent Board	an independent committee of the Board, consisting of Mr. Ralph
Committee”	Raymond Shea, formed to advise the Independent Shareholders
	in respect of the Transaction
“Independent Financial	BNP Paribas Capital, the independent financial adviser to the
Adviser”	Independent Board Committee and the Independent
	Shareholders in relation to the Transaction
“Independent Shareholders”	the shareholders of the Company other than CKI and its
	associates (as defined in the Listing Rules)

— 2 —

DEFINITIONS

“Initial Capital”	NZ$100 (approximately HK$595.4) to be injected as initial
	capital of HoldCo subject to further adjustment in accordance
	with the tax efficient acquisition/disposal structure as agreed
	by CKI and the Company
“Joint Announcement”	a joint announcement issued by CKI and the Company dated
	16th May, 2008 in relation to the Transaction
“LC Facility Letter”	the facility letter dated 25th April, 2008 executed by Australia
	and New Zealand Banking Group Limited and CKI in respect
	of the issue of the Letter of Credit
“Latest Practicable Date”	30th May, 2008, being the latest practicable date prior to the
	printing of this circular for the purpose of ascertaining certain
	information contained in this circular
“Letter of Credit”	has the meaning ascribed to it in the CKI Announcement
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“NZ$”	New Zealand dollars, the lawful currency of New Zealand
“Network Acquisition	a conditional sale and purchase agreement entered into between
Agreement”	(among others) VWE Network and Vector in respect of the
	purchase of the Wellington Network by VWE Network from
	Vector
“Purchase Price”	NZ$785 million (approximately HK$4,673.7 million) (subject
	to any adjustment provided in the Sale and Purchase
	Agreement), being the purchase price to be paid for the
	Acquisition
“Resolution”	the ordinary resolution to be proposed at the EGM to approve
	the acquisition by the Company of the Sale Shares and other
	transactions and matters as contemplated under the Agreement
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Sale and Purchase	a conditional sale and purchase agreement dated 28th April,
Agreement”	2008 entered into between CKI, WEDN, Vector and VMDS in
	respect of the Acquisition

— 3 —

DEFINITIONS

“Sale Shares”	50 ordinary shares of par value of NZ$1 (approximately
	HK$5.9537) each in the capital of HoldCo, representing 50%
	of the entire issued share capital of HoldCo as at Completion
“Shares”	ordinary shares of HK$1 each in the share capital of the
	Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Transaction”	the sale and purchase of the Sale Shares and other transactions
	and matters as contemplated by the Agreement
“Vector”	Vector Limited, a company incorporated under the laws of New
	Zealand and the ultimate holding company of VMDS
“VMDS”	Vector Metering Data Services Limited, a company incorporated
	under the laws of New Zealand
“VWE Management”	Vector Wellington Electricity Management Limited, a company
	incorporated under the laws of New Zealand and a wholly-
	owned subsidiary of VWE Network
“VWE Network”	Vector Wellington Electricity Network Limited, a company
	incorporated under the laws of New Zealand and a wholly-
	owned subsidiary of VMDS as at the date of the Sale and
	Purchase Agreement
“WEDN”	Wellington Electricity Distribution Network Limited, a company
	incorporated under the laws of New Zealand and an indirect
	wholly-owned subsidiary of CKI
“Wellington Network”	has the meaning ascribed to it in the CKI Announcement

Note: The figures in NZ$ are converted into HK$ at the rate of NZ$1: HK$5.9537 throughout this circular for indication purposes only.

— 4 —

LETTER FROM THE BOARD

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Executive Directors:

FOK Kin Ning, Canning (Chairman) TSO Kai Sum (Group Managing Director) CHOW WOO Mo Fong, Susan (also alternate to Mr. FOK Kin Ning, Canning and Mr. Frank John SIXT) Andrew John HUNTER KAM Hing Lam LEE Lan Yee, Francis LI Tzar Kuoi, Victor Neil Douglas MCGEE Frank John SIXT WAN Chi Tin YUEN Sui See CHAN Loi Shun (Alternate to Mr. KAM Hing Lam)

Non-Executive Directors: Ronald Joseph ARCULLI George Colin MAGNUS

Independent Non-Executive Directors: Holger KLUGE Ralph Raymond SHEA WONG Chung Hin

6th June, 2008

To the Shareholder(s)

Dear Sir or Madam,

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

1. INTRODUCTION

The Board announced in the Joint Announcement that on 16th May, 2008 (after trading hours), the Company and CKI had entered into the Agreement pursuant to which CKI agreed to procure the sale to the Company or its nominee or wholly-owned subsidiary of, and the Company agreed to purchase or procure its nominee or wholly-owned subsidiary to purchase, the Sale Shares pursuant to the terms of the Agreement.

— 5 —

LETTER FROM THE BOARD

Immediately following Completion, each of CKI (through its wholly-owned subsidiary) and the Company (itself or through its nominee or wholly-owned subsidiary) will be the beneficial owner of 50% of the entire issued share capital of HoldCo. CKI will use its best endeavours to procure the transfer of the entire issued share capital of WEDN to HoldCo prior to Completion. As mentioned in the CKI Announcement, CKI and WEDN entered into the Sale and Purchase Agreement on 28th April, 2008 with VMDS and Vector in respect of the Acquisition. Subsequently, Vector and VWE Network have entered into the Network Acquisition Agreement.

CKI and its associates are currently holding approximately 38.87% of the issued share capital of the Company. By virtue of this shareholding interest, CKI is a controlling shareholder of the Company and is accordingly a connected person of the Company. The Transaction therefore constitutes a connected transaction for the Company under the Listing Rules, and is conditional upon approval by the Independent Shareholders at the EGM. CKI and its associates will abstain from voting at the EGM.

The Independent Board Committee has been formed to advise the Independent Shareholders in respect of the Transaction. The Company has appointed BNP Paribas Capital as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Transaction.

The purpose of this circular is (i) to provide you with further information in respect of the Agreement and the Transaction; and (ii) to set out the opinions and recommendations of the Independent Board Committee and the Independent Financial Adviser in relation to the Transaction.

2. DETAILS OF THE AGREEMENT

THE AGREEMENT

Date

16th May, 2008 (after trading hours)

Parties

(1) CKI; and
(2) The Company

CKI and its associates currently hold approximately 38.87% of the issued share capital of the Company. By virtue of this shareholding interest, CKI is a controlling shareholder of the Company and is accordingly a connected person of the Company. The Transaction therefore constitutes a connected transaction for the Company under the Listing Rules.

— 6 —

LETTER FROM THE BOARD

Subject of the Transaction

Pursuant to the Agreement, among other things, CKI agreed to procure the sale to the Company or its nominee or wholly-owned subsidiary of, and the Company agreed to purchase or procure its nominee or wholly-owned subsidiary to purchase, the Sale Shares free from all encumbrances and together with all rights attaching thereto on or after Completion.

Conditions

Completion of the Transaction is conditional upon:

(a) the shareholders of the Company who are qualified to vote at the EGM approving the purchase by the Company (or its nominee or wholly-owned subsidiary) from CKI of the Sale Shares and the related transactions and matters contemplated under the Agreement as required under the Listing Rules;
(b) the receipt by CKI of its shareholders’ approval in writing approving the sale by CKI to the Company (or its nominee or wholly-owned subsidiary) of the Sale Shares and the related transactions and matters contemplated under the Agreement as required under the Listing Rules; and
(c) HoldCo becoming the sole registered and beneficial shareholder of WEDN.

If the conditions mentioned in (a) and (b) above have not been satisfied and the condition mentioned in (c) above has not been satisfied by CKI or waived by the Company before 1st October, 2008 (or such later date as agreed by CKI and the Company), then the Agreement shall lapse and the Transaction will not proceed.

The Company may waive the condition mentioned in (c) above on the condition that the payment of the amount stated in (b) in the paragraph headed “Consideration” below and any payment required to be made by the Company for funding the Purchase Price as mentioned in the paragraph headed “Consideration” below shall be postponed accordingly for a period equivalent to the number of Business Days between Completion and the date on which HoldCo shall become the sole registered and beneficial shareholder of WEDN.

As at the Latest Practicable Date, the condition mentioned in (b) above has been satisfied.

Completion shall take place on the next Business Day after the fulfillment or waiver of all the conditions mentioned above or such other date as agreed by CKI and the Company.

— 7 —

LETTER FROM THE BOARD

Consideration

The consideration for the Sale Shares shall be an amount equivalent to:

(a) NZ$50 (approximately HK$297.7), being 50% of the Initial Capital;

Plus

(b) 50% of the transaction costs and expenses incurred by CKI for the transactions contemplated under the Sale and Purchase Agreement (such transaction costs and expenses being estimated to be approximately NZ$10.5 million (approximately HK$62.5 million) as at the date of the Joint Announcement), but excluding any costs or expenses as may be paid with the Initial Capital.

Under the Sale and Purchase Agreement, WEDN shall pay the Purchase Price to VMDS at completion of the Acquisition. Subject to Completion, CKI and the Company agreed to fund the Purchase Price on a 50/50 basis to the extent it is not to be met by the Initial Capital and the amount to be drawn under the Facility. Such amount will be contributed by the Company by way of loans and/or equity to WEDN, HoldCo or AdvanCo or if CKI has made the payment of the Purchase Price prior to Completion, the Company will re-imburse 50% of such payment to CKI and the consideration payable by the Company to CKI for the Sale Shares under paragraph (a) above will be increased accordingly.

The consideration for the Sale Shares shall be satisfied and paid by the Company or its nominee or wholly-owned subsidiary in cash in the following manner:

On Completion, the Company shall pay or procure payment by its nominee or wholly-owned subsidiary, as purchaser of the Sale Shares, to CKI (or as CKI may direct) of the amount stated in paragraph (a) above (as may be increased if CKI has made the payment of the Purchase Price prior to Completion).
Notwithstanding Completion having taken place, the Company agrees and undertakes to pay or procure payment by its nominee or wholly-owned subsidiary to such parties as CKI may direct, the amount stated in paragraph (b) above upon notice by CKI within a reasonable period after the completion of the Sale and Purchase Agreement.

The consideration for the Sale Shares was determined after arm’s length negotiations between CKI and the Company on normal commercial terms. The consideration of the Transaction will be funded by the Company’s internal resources and external financings in such proportions to be further determined.

— 8 —

LETTER FROM THE BOARD

Undertakings

CKI has undertaken to inject (or procure the injection of) the Initial Capital into HoldCo prior to Completion.

With effect from Completion, the Company shall, or shall procure its nominee or wholly-owned subsidiary to, contribute and assume 50% of all the liabilities, indemnities, undertakings and obligations of CKI under and in relation to the Letter of Credit and the LC Facility Letter when the Letter of Credit is presented and settled.

The Company agreed to assume on Completion the guarantee in respect of the Facility to the extent of 50% of the amount to be drawn under the Facility on a several basis in such form and content as required by the relevant lenders for the purpose of facilitating the release by the lenders of 50% of CKI’s liability under CKI’s guarantee in relation to the Facility or under CKI’s agreement or undertaking to provide such guarantee.

3. INFORMATION ON THE SUBJECT OF THE TRANSACTION

HoldCo was incorporated on 6th May, 2008 pursuant to the laws of Bahamas. HoldCo is currently an indirect wholly-owned subsidiary of CKI and has not commenced any operation or business activities since incorporation.

WEDN is an indirect wholly-owned subsidiary of CKI and is a dormant company as at the date of the Joint Announcement save and except that it has entered into the Sale and Purchase Agreement on 28th April, 2008.

VWE Network and VWE Management were incorporated on 9th September, 2003 and 27th March, 2008 respectively. Since their respective incorporation dates up to the date of the Joint Announcement, they have not commenced any operation or business activities save and except the entering into of the Network Acquisition Agreement by VWE Network.

As mentioned in the CKI Announcement, CKI and WEDN entered into the Sale and Purchase Agreement on 28th April, 2008 with VMDS and Vector in respect of the Acquisition. Subsequently, Vector and VWE Network have entered into the Network Acquisition Agreement.

Immediately following Completion, each of CKI (through its wholly-owned subsidiary) and the Company (itself or through its nominee or wholly-owned subsidiary) will be the beneficial owner of 50% of the entire issued share capital of HoldCo. CKI will use its best endeavours to procure the transfer of the entire issued share capital of WEDN to HoldCo prior to Completion. Pursuant to the Agreement, each of CKI and the Company will nominate an equal number of representatives to be appointed as directors of HoldCo and WEDN upon Completion.

— 9 —

LETTER FROM THE BOARD

It is intended that the Company will account for the results of HoldCo and WEDN as “interests in associates” immediately following Completion. The results and assets of HoldCo and WEDN will be equity accounted for in the Group’s financial statements.

The Wellington Network comprises electricity network assets which form part of Vector’s electricity lines business in the Wellington, Porirua and Hutt Valley regions in New Zealand, having a system length of over 4,592km. The Wellington Network currently distributes electricity to residential, commercial and industrial customers in the region.

The unaudited net book value of the Wellington Network on the proforma basis as at 30th June, 2007 is approximately NZ$463.9 million (approximately HK$2,761.9 million). The unaudited net profits before interest and tax attributable to the Wellington Network on the proforma basis for the year ended 30th June, 2006 and the year ended 30th June, 2007 were approximately NZ$85.6 million (approximately HK$509.6 million) and approximately NZ$86.1 million (approximately HK$512.6 million) respectively. The unaudited net profits after interest and tax attributable to the Wellington Network on the proforma basis for the year ended 30th June, 2006 and the year ended 30th June, 2007 were approximately NZ$56.0 million (approximately HK$333.4 million) and approximately NZ$55.9 million (approximately HK$332.8 million) respectively.

4. INFORMATION ON THE CKI GROUP

The principal activities of the CKI Group are development, investment and operation of infrastructure businesses in Hong Kong, the Mainland, Australia, Canada, Philippines and the United Kingdom.

5. INFORMATION ON THE GROUP

The principal activity of the Group is the generation of electricity and its transmission and distribution to Hong Kong and Lamma Islands. The Company is also a joint partner in several power-related businesses in Australia and Canada and a gas distribution network business in the United Kingdom with CKI.

6. REASONS FOR THE TRANSACTION

The Transaction reflects the Company’s strategy of investing in infrastructure projects outside Hong Kong.

The Directors consider that the terms of the Agreement are normal commercial terms and are fair and reasonable and in the interests of the Company and its shareholders as a whole.

— 10 —

LETTER FROM THE BOARD

7. LISTING RULES IMPLICATIONS

Any connected person with a material interest in the Transaction, and any other Shareholders and their respective associates with a material interest in the Transaction, shall abstain from voting in respect of the Resolution.

CKI and its associates are currently holding approximately 38.87% of the issued share capital of the Company. By virtue of such shareholding interest, CKI is a controlling shareholder of the Company and is accordingly a connected person of the Company. The Transaction therefore constitutes a connected transaction for the Company under the Listing Rules, and is conditional upon approval by the Independent Shareholders at the EGM. CKI and its associates will abstain from voting at the EGM. To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, CKI and those of its associates are entitled to exercise control over the voting rights in respect of their respective Shares.

8. RECOMMENDATIONS

The Directors believe that the entering into of the Agreement and the Transaction is in the interests of the Company and the Shareholders as a whole, and that the terms of the Agreement and the Transaction are normal commercial terms and are fair and reasonable so far as the Shareholders as a whole are concerned.

Accordingly, the Directors recommend the Shareholders to vote in favour of the Resolution, which will be proposed as an ordinary resolution at the EGM.

The Independent Board Committee is required under the Listing Rules to advise the Independent Shareholders in relation to the Transaction. Since Mr. Wong Chung Hin and Mr. Holger Kluge, two of the three independent non-executive Directors, are also independent non-executive directors of Hutchison Whampoa Limited of which CKI is a subsidiary, they will not be appointed as members of the Independent Board Committee. As a result, only Mr. Ralph Raymond Shea has been appointed to and constitutes the Independent Board Committee to advise the Independent Shareholders in respect of the Transaction. BNP Paribas Capital has been appointed as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in this regard. Accordingly, your attention is drawn to the letter from the Independent Board Committee set out on page 13 of this circular, which contains its recommendation to the Independent Shareholders, and the text of a letter of advice from BNP Paribas Capital set out on pages 14 to 25 of this circular, which contains its advice to the Independent Board Committee and the Independent Shareholders.

— 11 —

LETTER FROM THE BOARD

9. EXTRAORDINARY GENERAL MEETING

Set out on pages 38 to 39 is a notice convening the EGM to be held at the Ballroom, 1st Floor, Harbour Plaza Hong Kong, 20 Tak Fung Street, Hung Hom, Kowloon, Hong Kong on Monday, 23rd June, 2008 at 10:30 a.m. for the purpose of considering and, if thought fit, passing the Resolution.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM or any adjourned meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed on it and return it to the registered office of the Company, 44 Kennedy Road, Hong Kong no later than 48 hours before the time for holding the EGM or any adjournment thereof. Completion and return of the enclosed form of proxy will not preclude you from attending and voting in person at the EGM or at any adjourned meeting should you so wish.

10. FURTHER INFORMATION

Your attention is drawn to the additional information set out in the appendix to this circular.

By Order of the Board Hongkong Electric Holdings Limited Fok Kin Ning, Canning Chairman

— 12 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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6th June, 2008

To the Independent Shareholder(s)

Dear Sir or Madam,

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

I refer to the circular of which this letter forms part. Terms defined in the circular shall have the same meanings when used herein unless the context otherwise requires.

The Independent Board Committee has been formed to advise the Independent Shareholders as to whether, in its opinion, the terms of the Transaction are fair and reasonable and the Transaction is in the interests of the Company and the Shareholders as a whole. BNP Paribas Capital has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Transaction.

I wish to draw your attention to the letter from the Board, as set out on pages 5 to 12 of this circular and the text of a letter of advice from BNP Paribas Capital, as set out on pages 14 to 25 of this circular, both of which provide details of the Transaction.

Having considered the terms of the Agreement, the advice of BNP Paribas Capital and the relevant information contained in the letter from the Board, I am of the opinion that the terms of the Transaction are fair and reasonable so far as the Independent Shareholders are concerned and that the Transaction is in the interests of the Company and the Shareholders as a whole.

Accordingly, I recommend the Independent Shareholders to vote in favour of the Resolution, which will be proposed as an ordinary resolution at the EGM.

Yours faithfully, Independent Board Committee of Hongkong Electric Holdings Limited Ralph Raymond SHEA

— 13 —

LETTER FROM BNP PARIBAS CAPITAL

The following is the text of the letter prepared by BNP Paribas Capital setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Transaction for inclusion in this circular.

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BNP Paribas Capital (Asia Pacific) Limited

59/F - 63/F Two International Finance Centre, 8 Finance Street, Central, Hong Kong

6th June, 2008

To the Independent Board Committee and Independent Shareholders

Dear Sirs,

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN THE HOLDCO

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the Agreement, details of which are set out in the Letter from the Board contained in the circular of the Company dated 6th June, 2008 (the “Circular”), of which this letter forms part. Terms defined in the Circular shall have the same meanings herein, unless the context otherwise requires.

As of the Latest Practicable Date, CKI and its associates are holding approximately 38.87% of the issued share capital of the Company. By virtue of this shareholding interest, CKI is a controlling shareholder of the Company and is accordingly a connected person of the Company. The Transaction therefore constitutes a connected transaction for the Company under the Listing Rules, and is conditional upon approval by the Independent Shareholders at the EGM. CKI and its associates will abstain from voting at the EGM. Any vote of the Independent Shareholders at the EGM shall be taken by poll. An Independent Board Committee has been established to advise the Independent Shareholders in respect of the terms of the Transaction.

— 14 —

LETTER FROM BNP PARIBAS CAPITAL

We are appointed as the Independent Financial Adviser to the Independent Board Committee in relation to the Transaction. We are a licensed corporation holding a license to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Cap 571 of the Laws of Hong Kong). We shall receive a fee from the Company for the delivery of this letter. The Company has also agreed to indemnify us and certain related persons against certain liabilities and expenses in connection with this engagement.

Apart from normal professional fees for our services to the Company as described above, no arrangement exists whereby we shall receive any fees or benefits from the Company, its subsidiaries or associates. We consider ourselves suitable to give independent financial advice to the Independent Board Committee and the Independent Shareholders on the terms of the Transaction. As at the 28th May, 2008, BNP Paribas S.A., our parent company, beneficially owns the following interests:

(i) 441,800 Shares, representing approximately 0.02% of the issued share capital of the Company;
(ii) 276,799 shares of CKI (stock code: 1038), representing approximately 0.01% of the issued share capital of CKI;
(iii) 11,735,624 shares of Hutchison Whampoa Limited (stock code: 0013), representing approximately 0.28% of the issued share capital of Hutchison Whampoa Limited;
(iv) 3,417,961 shares of Cheung Kong (Holdings) Limited (stock code: 0001), representing approximately 0.15% of the issued share capital of Cheung Kong (Holdings) Limited; and
(v) 2,048 shares of Vector (stock code: VCT), representing approximately 0.0002% of the issued share capital of Vector.

As at the 28th May, 2008, BNP Paribas provided certain banking facilities to one of CKI’s subsidiaries (with corporate guarantee from CKI) and to Hutchison Whampoa Ltd.

Cheung Kong (Holdings) Limited currently holds approximately 49.97% of the issued share capital of Hutchison Whampoa Limited which in turn holds approximately 84.58% of the issued share capital of CKI. In addition, CKI and its associates are currently holding approximately 38.87% of the issued share capital of the Company.

— 15 —

LETTER FROM BNP PARIBAS CAPITAL

We do not consider these shareholding interests and banking facilities would affect the objectivity of our advice, given the fact that (i) the interests so held by BNP Paribas S.A. in the Company are immaterial and are no different from that of the Independent Shareholders; (ii) the respective interests so held by BNP Paribas S.A. in CKI, Hutchison Whampoa Limited, Cheung Kong (Holdings) Limited and Vector are also immaterial; and (iii) the banking facilities provided by BNP Paribas are immaterial to the total assets of the BNP Paribas group.

In preparing this letter and in giving any opinion or advice, we have only had regard to the Transaction in isolation, and not in connection with any business plan or strategy, past, present or future with regard to the Company or the Group as a whole, nor have we viewed the Transaction as part of a series of other transactions or arrangements. We express no opinion as to whether the Transaction will be completed nor whether it will be successful.

We have relied on the statements, information and facts supplied, the opinions expressed and the representations made by the Directors, the advisers and management of the Company including those set out in the Circular and assumed that all statements, intentions, opinions and representations made, for which the Company and its Directors are solely and wholly responsible, were true, complete and accurate at the time they were made and continue to be so in all material respects up to and as at the Latest Practicable Date and that they may be relied upon.

We have reviewed, inter alia, the Agreement as well as the information prepared by the Company relating to the Transaction. We have assumed that the Agreement is enforceable against each of the parties thereto in accordance with its terms and that each of the parties will perform and will be able to perform their respective obligations thereunder. We have also assumed that all statements of intention of the management or the Directors, as set forth in the Circular, will be implemented and that all of the expectations of the Directors can be met. We have also relied on certain information available to the public (such as the relevant published documents of the Company and CKI) and we have assumed such information to be accurate and reliable. We have not, however, carried out any independent verification of such information, nor have we conducted an independent investigation into the business and affairs of the Company nor of the Wellington Network nor have we conducted any valuation or appraisal of any assets or liabilities, nor have we conducted any form of investigation into the commercial viability of the future prospects of the Group nor of the Wellington Network nor of the financial conditions or future prospects of any other parties. We consider that we have received and reviewed sufficient information to enable us to form a reasonable basis for our opinion.

— 16 —

LETTER FROM BNP PARIBAS CAPITAL

We have further assumed that all government, regulatory or other consents and approvals necessary, if any, for the effectiveness and implementation of the Agreement have been or will be obtained without any adverse effect on the contemplated benefits to the Company. We have been advised by the Directors that no material facts have been omitted from the information and representations provided in and referred to in the Circular and we have no reasons to believe that any material information has been withheld, or doubt the truth or accuracy of the information provided. We have also sought and received confirmation from the Directors that no materials facts or information have been omitted from the information supplied and/or opinions expressed.

Our opinion is necessarily based upon market, economic and other conditions as they existed and could be evaluated on, and on the information publicly available to us as of the Latest Practicable Date. We have no obligation to update this opinion to take into account events occurring after this opinion is delivered to the Independent Board Committee and the Independent Shareholders. It should be understood that subsequent developments or changes could occur that, if known at the time we rendered our opinion, would have affected or altered our opinion. We assume no responsibility or liability under such circumstances.

PRINCIPAL FACTORS AND REASONS

In formulating our view, we have taken into consideration the principal factors and reasons set out below. In reaching our conclusions, we have considered the results of the analyses in light of each other and ultimately reached an opinion based on the results of all analyses taken as a whole.

1. Background of the Transaction

As mentioned in the CKI Announcement, CKI and WEDN have entered into the Sale and Purchase Agreement on 28th April, 2008, with VMDS and Vector in respect of the Acquisition. Subsequently, Vector and VWE Network have entered into the Network Acquisition Agreement.

Pursuant to the Sale and Purchase Agreement, among other things, (i) WEDN agreed to acquire from VMDS the entire issued share capital of VWE Network, being the owner of the entire issued share capital of VWE Management; (ii) CKI agreed to guarantee the performance of WEDN’s obligations under the Sale and Purchase Agreement on the terms thereof; and (iii) Vector, being the ultimate holding company of VMDS, agreed to guarantee the performance of VMDS’s obligations under the Sale and Purchase Agreement on the terms thereof. As disclosed in the CKI Announcement, it was the intention of CKI to on-sell part of its interests in VWE Network to the Company prior to the completion of the Acquisition.

— 17 —

LETTER FROM BNP PARIBAS CAPITAL

The Network Acquisition Agreement is entered into for the purchase of the electricity network assets of the Wellington Network. The Wellington Network comprises electricity network assets which form part of Vector’s electricity lines business in the Wellington, Porirua and Hutt Valley regions in New Zealand, having a system length of over 4,592km. The Wellington Network currently distributes electricity to residential, commercial and industrial customers in the region.

2. Reasons for the Transaction

The Directors consider that the terms of the Agreement are normal commercial terms and are fair and reasonable and in the interests of the Company and its shareholders as a whole. As disclosed in the Letter from the Board, the Transaction reflects the Company’s strategy of investing in infrastructure projects outside Hong Kong. We note that the Company has previously partnered with CKI on a number of joint venture projects. In this regard, the Directors consider CKI an appropriate joint venture partner for the Company in the Wellington Network. Moreover, with the Group’s extensive experience in power generation, transmission and distribution, and with the CKI Group’s extensive experience in the development, investment and operation of infrastructure businesses, the Directors are of the view that both parties will be able to leverage on each other’s strengths through their joint ownership and investment in VWE Network, and that this will be beneficial to both parties.

We note that the principal businesses of Wellington Network are in line with that of the Group. Taking into account the nature of the Company’s business and investment strategy, the assets underlying Wellington Network, and the Company’s previous successful experience investing together with CKI, there is no reason for us to doubt the commercial rationale of the Transaction.

3. Overview of the Transaction

On 16th May, 2008, CKI and the Company entered into the Agreement, pursuant to which CKI agreed to procure the sale to the Company or its nominee or wholly-owned subsidiary of, and the Company agreed to purchase or procure its nominee or whollyowned subsidiary to purchase, the Sale Shares pursuant to the terms of the Agreement. HoldCo is currently an indirect wholly-owned subsidiary of CKI and has not commenced any operation or business activities since incorporation.

— 18 —

LETTER FROM BNP PARIBAS CAPITAL

As such, immediately following Completion, each of CKI (through its wholly-owned subsidiary) and the Company (itself or through its nominee or wholly-owned subsidiary) will be the beneficial owner of 50% of the entire issued share capital of HoldCo. CKI will use its best endeavours to procure the transfer of the entire issued share capital of WEDN to HoldCo prior to Completion. Upon Completion (provided that the entire issued share capital of WEDN has been transferred to HoldCo prior to Completion), HoldCo and WEDN will cease to be subsidiaries of CKI. Pursuant to the Agreement, each of CKI and the Company will nominate an equal number of representatives to be appointed as directors of HoldCo and WEDN upon Completion.

Pursuant to the Agreement, the consideration for the Sale Shares shall be an amount equivalent to:

(a) NZ$50 (approximately HK$297.7), being 50% of the Initial Capital;

Plus

(b) 50% of the transaction costs and expenses incurred by CKI for the transactions contemplated under the Sale and Purchase Agreement (such transaction costs and expenses being estimated to be approximately NZ$10.5 million (approximately HK$62.5 million) as at the date of the Joint Announcement), but excluding any costs or expenses as may be paid with the Initial Capital.

Under the Sale and Purchase Agreement, WEDN shall pay the Purchase Price to VMDS at completion of the Acquisition. Subject to Completion, CKI and the Company agreed to fund the Purchase Price on a 50/50 basis to the extent it is not to be met by the Initial Capital and the amount to be drawn under the Facility. Such amount will be contributed by the Company by way of loans and/or equity to WEDN, HoldCo, AdvanCo or if CKI has made the payment of the Purchase Price prior to Completion, the Company will reimburse 50% of such payment to CKI and the consideration payable by the Company to CKI for the Sale Shares under paragraph (a) above will be increased accordingly.

As stated in the Letter from the Board, the consideration for the Sale Shares shall be satisfied and paid in cash. Under the Agreement, CKI has undertaken to inject (or procure the injection of) the Initial Capital into HoldCo prior to Completion.

— 19 —

LETTER FROM BNP PARIBAS CAPITAL

With effect from Completion, the Company shall, or shall procure its nominee or whollyowned subsidiary to, contribute and assume 50% of all the liabilities, indemnities, undertakings and obligations of CKI under and in relation to the Letter of Credit and the LC Facility Letter when the Letter of Credit is presented and settled. The Company agreed to assume on Completion the guarantee in respect of the Facility to the extent of 50% of the amount to be drawn under the Facility on a several basis in such form and content as required by the relevant lenders for the purpose of facilitating the release by the lenders of 50% of CKI’s liability under CKI’s guarantee in relation to the Facility or under CKI’s agreement or undertaking to provide such guarantee.

The Directors consider that the consideration for the Sale Shares was determined after arm’s length negotiations between CKI and the Company on normal commercial terms.

4. Basis of the consideration

It is noted that under the Agreement, the Initial Capital, the transaction costs and expenses incurred by CKI for the transaction contemplated under the Sale and Purchase Agreement and the funding of the Purchase Price (to the extent not to be met by the Initial Capital and the amount to be drawn under the Facility) (the “Additional Funding”) will be paid by CKI and the Company on a 50/50 basis, which is pro rata to their shareholding in HoldCo. It is further noted that the Company will contribute and assume 50% of all the liabilities, indemnities, undertakings and obligations of CKI under and in relation to the Letter of Credit and the LC Facility Letter and the Company has agreed to assume on Completion the guarantee in respect of the Facility to the extent of 50% of the amount to be drawn under the Facility on a several basis, which are also pro rata to their shareholding.

With (i) the total Purchase Price of NZ$785.0 million (equivalent to approximately HK$4,673.7 million); (ii) the total transaction costs and expenses incurred by CKI of approximately NZ$10.5 million (equivalent to approximately HK$62.5 million); (iii) the total Initial Capital of NZ$100 (equivalent to approximately HK$595.4); and (iv) the Facility in the amount of NZ$400.0 million (equivalent to approximately HK$2,381.5 million) is expected to be drawn by WEDN to finance part of the Purchase Price, it is expected that the funding required by the Company under the Agreement is approximately NZ$197.8 million (equivalent to approximately HK$1,177.6 million).

In this relation, it is noted in the audited consolidated financial statements of the Group for the year ended 31st December, 2007 that the Group had total cash and cash equivalent resources of approximately HK$12,180 million as at 31st December, 2007.

— 20 —

LETTER FROM BNP PARIBAS CAPITAL

In addition, it is noted that the net asset value of Wellington Network is immaterial to those of the Group. As it is intended that the Company will account for the results of HoldCo and WEDN as “interests in associates” immediately following Completion, the results and assets of HoldCo and WEDN will be equity accounted for in the Group’s financial statements. Accordingly, it is expected that the Company’s provision of guarantees pursuant to the Transaction will increase the total amount of its contingent liabilities in respect of financial commitments of subsidiaries and associates by its share of the Facility, being approximately NZ$200 million (equivalent to approximately HK$1,190.7 million).

We are advised by the Company that it has carried out due diligence of Wellington Network and was able to provide its views in relation to the Transaction generally. We understand from the management of the Company that in determining the consideration, they have also taken into account various factors, including but not limited to, the regulated price of the electricity transmission applicable to Wellington Network.

Given that (i) the Transaction has been made shortly after CKI’s announcement of the Sale and Purchase Agreement relating to the acquisition of VWE Network from VMDS; (ii) VMDS is an independent third party to both CKI and the Company; and (iii) the Initial Capital, transaction costs and expenses incurred by CKI for the transaction contemplated under the Sale and Purchase Agreement and the Additional Funding are to be paid while the related liabilities, indemnities, undertaking and obligations are to be contributed and assumed, and the related guarantee are to be made by CKI and the Company on a 50/50 basis, which is pro rata to the shareholding in HoldCo, we have no reason to doubt the fairness and reasonableness of the terms of the Agreement.

5. Analysis on Purchase Price

To complete our opinion, we have conducted (i) a comparable companies analysis, and (ii) a comparable transactions analysis on the Purchase Price. In selecting the best comparable companies, we have focused on those that could meet the following criteria:

it is principally engaged in electricity transmission and distribution business;
its shares are listed on a stock exchange; and
the relevant information is available in the public domain for the last four years.

It should be noted however that when considering the analysis set out below (i) the businesses, operations and prospects of the Wellington Network are not entirely the same as those companies mentioned in the analysis and (ii) that the financial statements of those companies were prepared in accordance with their respective generally accepted accounting principles which may differ from those of Wellington Network.

— 21 —

LETTER FROM BNP PARIBAS CAPITAL

Amongst various ratios analysis, we consider that the analysis of an enterprise value (“EV”) to earnings before interest, tax, depreciation and amortization (“EBITDA”) multiple is the most important and appropriate valuation benchmark. By analyzing EV to EBITDA multiples, we are able to focus on the operating cash flow of a company, which provides a meaningful comparison through eliminating effects due to different debt levels, taxation, fixed asset bases and depreciation assumptions among comparable companies. We have also compared the price to book ratio in the comparable companies analysis.

(i) Comparable companies analysis

Set out below are the EV to EBITDA multiples and price to book ratio of certain comparable companies.

			EV to
			EBITDA	Price to
		Country	multiple	Book Ratio
Australia and New Zealand operators
Babcock & Brown
Infrastructure Group		Australia	20.2	0.8
SP Ausnet		Australia	12.9	4.5
Spark Infrastructure Group		Australia	18.0	7.4
Vector (the ultimate holding
company of VMDS)		New Zealand	8.1	1.0
Simple average			14.8	3.4
International operators
ITC Holdings Corp		United States	18.9	3.1
National Grid Plc		Britain	10.4	3.5
Companhia de Transmissao
de Energia Eletrica Paulista		Brazil	7.9	1.8
Elia System Operator SA/NV		Belgium	11.2	1.0
Terna - Rete Elettrica Nationale	SpA	Italy	8.6	2.6
Simple average			11.4	2.4
Simple average			12.9	2.9
The Transaction
Wellington Network	New Zealand		7.6	1.7

Sources: Bloomberg, companies’ published documents and the Company’s information

— 22 —

LETTER FROM BNP PARIBAS CAPITAL

In conducting the comparable companies analysis, we view those transmission and distribution operators in Australia and New Zealand as the best comparable companies to Wellington Network given that they share similar characteristics, including business focus, market position, regulatory environment and characteristics of customers base.

Based on the pro forma management accounts of the Wellington Network for the year ended 30th June, 2007, the EBITDA was NZ$103.7 million (approximately HK$617.4 million) and the unaudited net book value was approximately NZ$463.9 million (approximately HK$2,761.9 million). Based on the consideration of NZ$785.0 million (approximately HK$4,673.7 million), the implied EV to EBITDA multiple and price to book ratio of Wellington Network were approximately 7.6 times and approximately 1.7 times, respectively.

The implied EV to EBITDA multiple and price to book ratio of Wellington Network are below the range and on the low side of the range to the corresponding ratios of those operators in Australia and New Zealand respectively.

(ii) Comparable transactions analysis

Comparable precedent transaction analysis must be viewed in the context of factors that include market dynamics, competitive differences and significance of stake acquired. Below sets forth the precedent transactions that we consider most comparable.

					EV to
Announced				% of shares	EBITDA
date	Target	Target activity	Acquirer	acquired	multiple
Target assets located in Australia and New		Zealand
31st July, 2007	National	Electricity	CitySpring	100	16.4
	Grid plc	transmission	Infrastructure
		in Australia	Management Pte.	Ltd.
20th December, 2006	Country Energy,	Electricity	Australian	100	15.3
	Hydro Quebec	transmission	Pipeline Trust
	International	in Australia
	Group and
	Fonds de
	Solidarite des
	Travailleurs
	de Quebec

— 23 —

LETTER FROM BNP PARIBAS CAPITAL

						EV to
Announced			% of		shares	EBITDA
date	Target	Target activity	Acquirer	acquired		multiple
30th March, 2006	Murraylink HQI	Electricity	Australian		100	15.0
	Australia Pty	transmission	Pipeline Trust
	Limited;	in Australia
	SNC-Lavalin
	Investment
	Australia Pty Ltd
2nd November, 2004	Powerco Ltd	Electricity and	Babcock &
		gas distribution	Brown
		in New Zealand	Infrastructure Ltd		100	9.2
Simple average for target assets located in Australia and New Zealand						14.0
Target assets located worldwide
17th September, 2007	Empresa de	Electricity	Terna		100	12.4
	Transmissao de	transmission	Participacoes S.A.
	Energia do	in Brazil
	Oeste Ltda
21st August, 2007	Goiana	Electricity	Transmissora		100	10.6
	Transmissora	transmission	Sudeste Nordeste SA
	de Energia S.A.;	in Brazil
	Paraiso-Acu
	Transmissora
	de Energia SA
16th October, 2006	Edison Rete SpA	Electricity	Rete Trasmissione		100	12.1
		transmission	Locale SpA
		in Italy
16th October, 2006	AEM	Electricity	Rete Trasmissione		99.99	11.8
	Trasmissione	transmission	Locale SpA
	SpA	in Italy
7th November, 2005	Cap Rock	Electricity	Lindsay Goldberg &		100	9.2
	Holding	distribution	Bessemer LP
	Corporation	in the
		United States
8th August, 2005	Acea	Power grid	Terna - Rete		100	11.0
	Trasmissione	operation	Elettrica
	SpA	in Italy	Nazionale SpA
Simple average for target assets located in worldwide (exclude Australia and New Zealand)						11.2
Simple average for target assets located in worldwide						12.3
The Transaction
16th May, 2008	Wellington	Electricity	WEDN		100	7.6
	Network	transmission
		in New Zealand

Sources: Mergermarket, companies’ published documents and the Company’s information

Based on the above, we note that the acquirers of the precedent transactions had acquired target assets located in (i) Australia and New Zealand and (ii) worldwide (excluding Australia and New Zealand) with EV to EBITDA multiple ranging from (i) 9.2 to 16.4 times and (ii) 9.2 to 12.4 times, respectively. The implied EV to EBITDA multiple for Wellington Network of approximately 7.6 times is below the range.

Taking into account the above factors, we consider the Purchase Price to be reasonable.

— 24 —

LETTER FROM BNP PARIBAS CAPITAL

CONCLUSION

Having considered the above principal reasons and factors, we are of the view that the Transaction is in the ordinary and usual course of business of the Company and is entered into on normal commercial terms, is fair and reasonable and in the interests of the Company and its Shareholders as a whole. Accordingly, we would advise the Independent Board Committee to recommend the Independent Shareholders to and also recommend the Independent Shareholders to vote in favour of the Resolution.

Yours faithfully, For and on behalf of BNP Paribas Capital (Asia Pacific) Limited

Isadora Li

Head of Investment Banking, North Asia

— 25 —

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

The issue of this circular has been approved by the Directors.

2. DISCLOSURE OF DIRECTORS’ INTERESTS

As at the Latest Practicable Date, the interests of the Directors in the issued share capital of the Company and its Associated Corporations as recorded in the register required to be kept under Section 352 of the SFO were as follows:

Long Positions in Shares of the Company

					Approximate
		Nature of	Number of		% of
Name of Director	Capacity	Interests	Shares Held	Total	Shareholding
Francis Lee Lan-yee	Beneficial owner	Personal	739	739	�0%
Yuen Sui See	Beneficial owner	Personal	1,500	1,500	�0%
Ronald Joseph Arculli	Interest of controlled	Corporate	2,011	2,011	�0%
	corporation
Victor Li Tzar-kuoi	Interest of child or	Family	151,000
	spouse
				829,750,612	�38.87%
	Beneficiary	Other	829,599,612
	of trusts		(Notes 1 and 2)

— 26 —

GENERAL INFORMATION

APPENDIX

Notes:

(1) These shares are held by subsidiaries of CKI.

The discretionary beneficiaries of each of The Li Ka-Shing Unity Discretionary Trust (“DT1”) and another discretionary trust (“DT2”) are, inter alia, Mr. Victor Li Tzar-kuoi, his wife and children, and Mr. Richard Li Tzar-kai. Each of Li Ka-Shing Unity Trustee Corporation Limited (“TDT1”, which is the trustee of DT1) and Li Ka-Shing Unity Trustcorp Limited (“TDT2”, which is the trustee of DT2) holds units in The Li Ka-Shing Unity Trust (“UT1”) but is not entitled to any interest or share in any particular property comprising the trust assets of the said unit trust. Li KaShing Unity Trustee Company Limited (“TUT1”) as trustee of UT1 and its related companies in which TUT1 as trustee of UT1 is entitled to exercise or control the exercise of one-third or more of the voting power at their general meetings (“TUT1 related companies”) hold more than one-third of the issued share capital of Cheung Kong (Holdings) Limited (“CKH”). Certain subsidiaries of CKH in turn together hold more than one-third of the issued share capital of Hutchison Whampoa Limited (“HWL”). A subsidiary of HWL in turn holds more than one-third of the issued share capital of CKI.

The entire issued share capital of TUT1 and of the trustees of DT1 and DT2 are owned by Li KaShing Unity Holdings Limited (“Unity Holdco”). Each of Mr. Li Ka-shing, Mr. Victor Li Tzar-kuoi and Mr. Richard Li Tzar-kai is interested in one-third of the entire issued share capital of Unity Holdco. TUT1 is only interested in the shares of CKH by reason only of its obligation and power to hold interests in those shares in its ordinary course of business as trustee and, when performing its functions as trustee, exercises its power to hold interests in the shares of CKH independently without any reference to Unity Holdco or any of Mr. Li Ka-shing, Mr. Victor Li Tzar-kuoi and Mr. Richard Li Tzar-kai as a holder of the shares of Unity Holdco as aforesaid.

By virtue of the above and as a discretionary beneficiary of each of DT1 and DT2 and as a Director of CKH, Mr. Victor Li Tzar-kuoi is taken to have a duty of disclosure in relation to the shares of CKH held by TUT1 as trustee of UT1 and TUT1 related companies, the shares of HWL held by the subsidiaries of CKH, the shares of CKI held by the subsidiary of HWL and the shares of the Company held by the subsidiaries of CKI under the SFO as a Director of the Company. Although Mr. Richard Li Tzar-kai is interested in one-third of the entire issued share capital of Unity Holdco and is a discretionary beneficiary of each of DT1 and DT2, he is not a director of CKH and has no duty of disclosure in relation to the shares of CKH held by TUT1 as trustee of UT1 and TUT1 related companies under the SFO.

(2) Mr. Victor Li Tzar-kuoi, by virtue of his interests as described in Note (1) above and as a Director of the Company, is also deemed to be interested in the shares of Associated Corporations of the Company held through the Company under the SFO.

— 27 —

APPENDIX

GENERAL INFORMATION

The following are the Company’s Associated Corporations:

	Percentage of
	equity held
Name	by the Company
Alpha Central Profits Limited	100
Associated Technical Services Limited	100
Beta Central Profits Limited	100
Bonlink Investment Limited	100
Cavendish Construction Limited	100
CHEDHA Holdings Pty Limited	27.93
CHES Networks Pty Limited	33.33
CitiPower I Pty Limited	27.93
CitiPower II Pty Limited	27.93
CitiPower Pty	27.93
CKI Power Development Pty Limited	27.93
CKI Power Distribution Pty Limited	27.93
CKI Spark Holdings No. One Limited	54.76
CKI Spark Holdings No. Two Limited	54.76
CKI Utilities Development Limited	54.76
CKI/HEI Electricity Assignment Pty Limited	27.93
CKI/HEI Electricity Distribution Holdings (Australia) Pty Limited	27.93
CKI/HEI Electricity Distribution Pty Limited	27.93
CKI/HEI Electricity Distribution (Services) Pty Limited	27.93
CKI/HEI Electricity Distribution Two Pty Limited	27.93
CKI/HEI Energy Holdings Pty Limited	50
CKI/HEI Power Holdings Pty Limited	27.93
Coty Limited	100
Dako International Limited	100
Dunway Investment Limited	100
ETSA Ancillary Pty Limited	27.93
ETSA FRC Pty Limited	27.93
ETSA Utilities Finance Pty Limited	27.93
Fenning Limited	100
Fortress Advertising Company Limited	100
Goldteam Resources Limited	100
Gusbury Enterprises Incorporation	100
HEI China Limited	100
HEI Distribution Finance (Australia) Pty Ltd.	100
HEI Electricity Distribution (Malaysian) Limited	100
HEI Investment Holdings Limited	100
HEI Leting Limited	100
HEI Power (Malaysian) Limited	100
HEI Power Development Pty Limited	27.93
HEI Power Distribution Pty Limited	27.93
HEI Spark Holdings No. One Limited	54.76
HEI Tap Limited S.A.	100
HEI Transmission Finance (Australia) Pty Limited	100
HEI Utilities (Malaysian) Limited	100
HEI Utilities Development Limited	54.76
HKE Fund Management Limited S.à r.l.	100

— 28 —

GENERAL INFORMATION

APPENDIX

	Percentage of
	equity held
Name	by the Company
Hong Kong Electric International Finance (Australia) Pty Limited	100
Hong Kong Telecommunications Holdings (Australia) Pty Limited	33.33
Hong Kong Telecommunications Holdings (Malaysian) Limited	33.33
Hongkong Electric (BVI) Limited	100
Hongkong Electric (Cayman) Limited	100
Hongkong Electric (Natural Gas) Limited	100
Hongkong Electric Finance (Cayman) Limited	100
Hongkong Electric Finance Limited	100
Hongkong Electric Fund Management Limited	100
Hongkong Electric International Limited	100
Hongkong Electric International Power (Mauritius) Limited	100
Hongkong Electric Yunnan Dali Wind Power Company Limited	100
Huaneng Hongkong Electric Dali Wind Power Company Limited	45
International Infrastructure Services Company Limited	50
Kentson Limited	100
Marregon (No.2) Pty Limited	27.93
Marregon Pty Limited	27.93
More Advance Development Limited	100
Powercor Australia Limited	27.93
Powercor Pty Limited	27.93
Powercor Australia LLC	27.93
Powercor Australia Holdings Pty Limited	27.93
Ratchaburi Power Company, Limited	25
Riverland Investment Limited	100
Rolling Hills International (Chengde) Wind Power Company Limited	66.7
Secan Limited	20
Sigerson Business Corp.	100
Silk Telecom Pty Limited	33.33
Silk Telecom (WA) Pty Limited	33.33
Stanley Power Inc.	50
The Hongkong Electric Company, Limited	100
TransAlta Cogeneration Ltd.	24.995
Utilities Management Pty Limited	27.93

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its Associated Corporation which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest and short positions which they were taken or deemed to have under such provisions of the SFO) or which were recorded in the register required to be kept by the Company under Section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers.

There is no contract or arrangement subsisting at the Latest Practicable Date in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

— 29 —

GENERAL INFORMATION

APPENDIX

None of the Directors has had any direct or indirect interest in any assets which have since 31 December 2007 (being the date to which the latest published audited financial statements of the Company were made up) been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

3. SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN THE SHARE CAPITAL OF THE COMPANY

According to the register kept under Section 336 of the SFO and information received by the Company, as at the Latest Practicable Date, Shareholders (other than Directors or chief executives of the Company) who had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Part XV of the SFO were as follows:

Long Positions in Shares of the Company

			Approximate
		Number of	% of
Name	Capacity	Shares Held	Shareholding
Silchester International	Investment Manager	128,006,957	6.00%
Investors Limited
Interman Development Inc.	Beneficial owner	186,736,842	8.75%
		(Note 1)
Venniton Development Inc.	Beneficial owner	197,597,511	9.26%
		(Note 1)
Univest Equity S.A.	Beneficial owner	279,011,102	13.07%
		(Note 1)
Monitor Equities S.A.	Beneficial owner & Interest of	287,211,674	13.46%
	controlled corporation	(Note 1)
Hyford Limited	Interest of controlled corporations	829,599,612	38.87%
		(Note 2)
Cheung Kong Infrastructure	Interest of controlled corporations	829,599,612	38.87%
Holdings Limited		(Note 2)

— 30 —

GENERAL INFORMATION

APPENDIX

			Approximate
		Number of	% of
Name	Capacity	Shares Held	Shareholding
Hutchison Infrastructure	Interest of controlled corporations	829,599,612	38.87%
Holdings Limited		(Note 3)
Hutchison International Limited	Interest of controlled corporations	829,599,612	38.87%
		(Note 3)
Hutchison Whampoa Limited	Interest of controlled corporations	829,599,612	38.87%
		(Note 3)
Cheung Kong (Holdings) Limited	Interest of controlled corporations	829,599,612	38.87%
		(Note 4)
Li Ka-Shing Unity Trustee	Trustee	829,599,612	38.87%
Company Limited as trustee		(Note 5)
of The Li Ka-Shing Unity Trust
Li Ka-Shing Unity Trustee	Trustee & beneficiary of a trust	829,599,612	38.87%
Corporation Limited as trustee		(Note 6)
of The Li Ka-Shing Unity
Discretionary Trust
Li Ka-Shing Unity Trustcorp	Trustee & beneficiary of a trust	829,599,612	38.87%
Limited as trustee of another		(Note 6)
discretionary trust
Li Ka-shing	Founder of discretionary trusts &	829,599,612	38.87%
	interest of controlled corporations	(Note 6)

— 31 —

GENERAL INFORMATION

APPENDIX

Notes:

(1) These are direct or indirect wholly-owned subsidiaries of Hyford Limited (“Hyford”) and their interests are duplicated in the same 829,599,612 shares of the Company held by Hyford described in Note (2) below.
(2) CKI is deemed to be interested in the 829,599,612 shares of the Company as referred to in Note (1) above as it holds more than one-third of the issued share capital of Hyford indirectly. Its interests are duplicated in the interest of Hutchison Whampoa Limited (“HWL”) in the Company described in Note (3) below.
(3) HWL is deemed to be interested in the 829,599,612 shares of the Company as referred to in Note (2) above as it holds more than one-third of the issued share capital of Hutchison International Limited, which holds more than one-third of the issued share capital of Hutchison Infrastructure Holdings Limited (“HIH”). HIH holds more than one-third of the issued share capital of CKI.
(4) Cheung Kong (Holdings) Limited (“CKH”) is deemed to be interested in the 829,599,612 shares of the Company as referred to in Note (3) above as certain subsidiaries of CKH hold more than onethird of the issued share capital of HWL.
(5) Li Ka-Shing Unity Trustee Company Limited (“TUT1”) as trustee of The Li Ka-Shing Unity Trust (“UT1”) is deemed to be interested in those shares of the Company described in Note (4) above as TUT1 as trustee of UT1 and its related companies in which TUT1 as trustee of UT1 is entitled to exercise or control the exercise of one-third or more of the voting power at their general meetings hold more than one-third of the issued share capital of CKH.
(6) By virtue of the SFO, each of Mr. Li Ka-shing, being the settlor and may being regarded as a founder of each of The Li Ka-Shing Unity Discretionary Trust (“DT1”) and another discretionary trust (“DT2”) for the purpose of the SFO, Li Ka-Shing Unity Trustee Corporation Limited (“TDT1”) as trustee of DT1 and Li Ka-Shing Unity Trustcorp Limited (“TDT2”) as trustee of DT2 is deemed to be interested in the same block of shares TUT1 as trustee of UT1 is deemed to be interested in as referred to in Note (5) above as all issued and outstanding units in UT1 are held by TDT1 as trustee of DT1 and by TDT2 as trustee of DT2. More than one-third of the issued share capital of TUT1 and of the trustees of the said discretionary trusts are owned by Li Ka-Shing Unity Holdings Limited (“Unity Holdco”). Mr. Li Ka-shing owns one-third of the issued share capital of Unity Holdco.

Save as disclosed above, as at the Latest Practicable Date, the Company had not been notified by any persons (other than Directors or chief executives of the Company) who had interests or short positions in the shares and underlying shares of the Company, which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who are interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group, or any options in respect of such capital.

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GENERAL INFORMATION

APPENDIX

The following is a list of the Directors who, as at the Latest Practicable Date, were also directors of the companies which have interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of Common Director

Name of Company

Fok Kin Ning, Canning Kam Hing Lam Li Tzar Kuoi, Victor George Colin Magnus Frank John Sixt

Cheung Kong (Holdings) Limited

Fok Kin Ning, Canning Cheung Kong Infrastructure Holdings Limited Tso Kai Sum Chow Woo Mo Fong, Susan Andrew John Hunter Kam Hing Lam Li Tzar Kuoi, Victor George Colin Magnus Frank John Sixt Kam Hing Lam Hyford Limited Li Tzar Kuoi, Victor Chow Woo Mo Fong, Susan Interman Development Inc. Kam Hing Lam Frank John Sixt Li Ka-Shing Unity Trustcorp Limited Frank John Sixt Li Ka-Shing Unity Trustee Company Limited Frank John Sixt Li Ka-Shing Unity Trustee Corporation Limited Chow Woo Mo Fong, Susan Monitor Equities S.A. Kam Hing Lam Chow Woo Mo Fong, Susan Univest Equity S.A. Kam Hing Lam Chow Woo Mo Fong, Susan Venniton Development Inc. Kam Hing Lam

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GENERAL INFORMATION

APPENDIX

Name of Common Director

Name of Company

Fok Kin Ning, Canning Chow Woo Mo Fong, Susan Holger Kluge Kam Hing Lam Li Tzar Kuoi, Victor George Colin Magnus Frank John Sixt Wong Chung Hin

Hutchison Whampoa Limited

Fok Kin Ning, Canning Chow Woo Mo Fong, Susan Kam Hing Lam Li Tzar Kuoi, Victor Frank John Sixt

Hutchison International Limited

Chow Woo Mo Fong, Susan Frank John Sixt

Hutchison Infrastructure Holdings Limited

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into, or proposed to enter into, a service contract with any member of the Group which does not expire or is not terminable by such member of the Group within one year without payment of compensation, other than statutory compensation.

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GENERAL INFORMATION

APPENDIX

5. COMPETING BUSINESS INTERESTS OF DIRECTORS

The interests of Directors in businesses which may compete with the Group’s business of investing overseas in power generation, transmission and distribution and other infrastructure facilities (“Overseas Business”) are as follows:

Name of Director Name of Company Nature of Interests Fok Kin Ning, Canning Hutchison Whampoa Limited Executive Director Cheung Kong Infrastructure Holdings Limited Executive Director Tso Kai Sum Cheung Kong Infrastructure Holdings Limited Executive Director Chow Woo Mo Fong, Susan Hutchison Whampoa Limited Executive Director Cheung Kong Infrastructure Holdings Limited Executive Director Andrew John Hunter Cheung Kong Infrastructure Holdings Limited Executive Director Spark Infrastructure Group Non-executive Director Kam Hing Lam Hutchison Whampoa Limited Executive Director Cheung Kong Infrastructure Holdings Limited Executive Director Spark Infrastructure Group Non-executive Director Li Tzar Kuoi, Victor Hutchison Whampoa Limited Executive Director Cheung Kong Infrastructure Holdings Limited Executive Director George Colin Magnus Hutchison Whampoa Limited Non-executive Director Cheung Kong Infrastructure Holdings Limited Non-executive Director Frank John Sixt Hutchison Whampoa Limited Executive Director Cheung Kong Infrastructure Holdings Limited Executive Director

The Board is of the view that the Group is capable of carrying on its Overseas Business independent of, and at arm’s length from the businesses of the above companies. When making decisions on the Overseas Business, the above Directors, in the performance of their duties as Directors of the Company, have acted and will continue to act in the commercial best interest of the Group and all its Shareholders.

6. PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

Pursuant to Article 80 of the Articles of Association of the Company, subject to the Listing Rules, at any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:

(i) by the chairman;

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GENERAL INFORMATION

APPENDIX

(ii) by at least five members present in person or by proxy;
(iii) by any member or members present in person or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; and
(iv) by a member or members holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

Unless a poll be so demanded, a declaration by the chairman that a resolution has on a show of hands been carried or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book containing the minutes of the proceedings of the Company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution.

The vote on the Resolution at the EGM shall be taken by poll.

7. INDEPENDENT FINANCIAL ADVISER

The following is the qualification of the Independent Financial Adviser which has given advice contained in this circular:

Name Qualification

BNP Paribas Capital A licensed corporation under the SFO, licensed to conduct Types 1 (dealing in securities) and 6 (advising on corporate finance) regulated activities

As at 28th May, 2008, BNP Paribas S.A., the parent company of BNP Paribas Capital held 441,800 Shares, representing approximately 0.02% of the issued share capital of the Company. Save as disclosed above, as at 28th May, 2008, BNP Paribas Capital was not beneficially interested in the share capital of any member of the Group or had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group and had no interest, either directly or indirectly, in any assets which have been, since the date to which the latest published audited financial statements of the Company were made up, acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

The letter given by BNP Paribas Capital is given as of the date of this circular for incorporation herein.

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GENERAL INFORMATION

APPENDIX

8. CONSENTS

BNP Paribas Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name and letter in the form and context in which it appears.

9. NO MATERIAL ADVERSE CHANGE

The Directors confirm that, as at the Latest Practicable Date, they are not aware of any material adverse changes in the financial or trading position or prospects of the Group since 31 December 2007, being the date of the latest audited consolidated financial statements of the Group were made up.

10. MISCELLANEOUS

(a) The company secretary of the Company is Ms. Wong Lee Wah, Lillian, a fellow member of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries.
(b) The Company’s share registrar is Computershare Hong Kong Investor Services Limited at 46th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(c) This circular has been prepared in both English and Chinese. In the case of any discrepancy, the English text shall prevail.

11. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the Agreement is available for inspection during normal business hours at the registered office of the Company at 44 Kennedy Road, Hong Kong from the date of this circular up to and including 20th June, 2008.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Hongkong Electric Holdings Limited (the “ Company ”) will be held at the Ballroom, 1st Floor, Harbour Plaza Hong Kong, 20 Tak Fung Street, Hung Hom, Kowloon, Hong Kong on Monday, 23rd June, 2008 at 10:30 a.m. for the purposes of considering and, if thought fit, passing with or without modification the following resolution as an Ordinary Resolution :

“ THAT the terms and conditions of the agreement made between the Company and Cheung Kong Infrastructure Holdings Limited (“ CKI ” ) dated 16th May, 2008 (the “ Agreement ”), a copy of which has been produced to this meeting marked “A” and signed by the Chairman of the meeting for the purpose of identification, the acquisition by the Company of 50% of the entire issued share capital of Wellington Electricity Distribution Network Holdings Limited as at completion of the Agreement and the carrying out by the Company of the related transactions as contemplated under the Agreement (collectively, the “ Transactions ”), and/or as set out in the circular to the shareholders of the Company dated 6th June, 2008 (the “ Circular ”) of which this notice of meeting forms part, a copy of which has been produced to this meeting marked “B” and signed by the Chairman of the meeting for the purpose of identification, and the implementation, exercise or enforcement of any of the rights, and performance of any of the obligations under the Agreement and/or the Transactions be and are hereby approved; and any two executive directors of the Company be and are hereby authorised to execute all such documents and deeds (and if necessary apply the common seal of the Company thereto) and do and authorise all such acts, matters and things as they may in their discretion consider necessary or desirable on behalf of the Company for the purpose of implementing, and otherwise in connection with, the Agreement and the Transactions, and authorise the implementation, exercise or enforcement of any of the rights, and performance of any of the obligations under the Agreement and/or any deed, document, undertaking or obligation entered into or associated with the Agreement and/or the Transactions, including agreeing any modifications, amendments, waivers, variations or extensions of the Agreement and/or any deed, document, undertaking or obligation entered into or associated with the Agreement and/ or the Transactions, as such directors may deem fit.”

By order of the Board

Hongkong Electric Holdings Limited Lillian Wong Company Secretary

Hong Kong, 6th June, 2008

— 38 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

(1) The above resolution will be put to the vote at the meeting by way of a poll.
(2) A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote for him. (The number of proxies appointed by any member who is a holder of two or more shares shall not exceed two.) A proxy need not be a member of the Company. To be valid, such member of the Company must complete the enclosed form of proxy in accordance with the instructions printed on it and return it to the registered office of the Company, 44 Kennedy Road, Hong Kong no later than 48 hours before the time for holding the meeting (or any adjournment thereof). Completion and return of the enclosed form of proxy will not preclude such member of the Company from attending and voting in person at the above meeting (or any adjournment thereof) should such member of the Company so wish.
(3) The register of members of the Company will be closed from Friday, 20th June, 2008 to Monday, 23rd June, 2008, both days inclusive, during which period no transfer of shares will be effected. To qualify for the right to attend and vote at the above meeting (or any adjournment thereof), all share transfers accompanied by the relevant share certificates must be lodged with the Company’s registrars, Computershare Hong Kong Investor Services Limited, Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong no later than 4:30 p.m. on 19th June, 2008.
(4) Shareholders are advised to read the circular to shareholders of the Company dated 6th June, 2008 (the “Circular”) which contains information concerning the resolution to be proposed at the above meeting (or any adjournment thereof).
(5) Regarding directors’ interests in the matter dealt with by the above resolution, shareholders are advised to read the Appendix to the Circular on pages 26 to 35 which contains such information.

— 39 —

AI assistant

Power Assets Holdings Limited — Proxy Solicitation & Information Statement 2008

48865_rns_2008-06-05_2a545d50-66ab-4709-89cf-a57362555c9f.pdf

���������� Hongkong Electric Holdings Ltd.

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

CONTENT

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

1. INTRODUCTION

LETTER FROM THE BOARD

2. DETAILS OF THE AGREEMENT

THE AGREEMENT

Date

Parties

Subject of the Transaction

Conditions

Consideration

Undertakings

3. INFORMATION ON THE SUBJECT OF THE TRANSACTION

LETTER FROM THE BOARD

4. INFORMATION ON THE CKI GROUP

5. INFORMATION ON THE GROUP

6. REASONS FOR THE TRANSACTION

7. LISTING RULES IMPLICATIONS

8. RECOMMENDATIONS

9. EXTRAORDINARY GENERAL MEETING

10. FURTHER INFORMATION

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

BNP Paribas Capital (Asia Pacific) Limited

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN THE HOLDCO

INTRODUCTION

LETTER FROM BNP PARIBAS CAPITAL

LETTER FROM BNP PARIBAS CAPITAL

LETTER FROM BNP PARIBAS CAPITAL

PRINCIPAL FACTORS AND REASONS

1. Background of the Transaction

2. Reasons for the Transaction

3. Overview of the Transaction

LETTER FROM BNP PARIBAS CAPITAL

LETTER FROM BNP PARIBAS CAPITAL

4. Basis of the consideration

LETTER FROM BNP PARIBAS CAPITAL

5. Analysis on Purchase Price

LETTER FROM BNP PARIBAS CAPITAL

(i) Comparable companies analysis

(ii) Comparable transactions analysis

LETTER FROM BNP PARIBAS CAPITAL

CONCLUSION

Isadora Li

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF DIRECTORS’ INTERESTS

Long Positions in Shares of the Company

APPENDIX

APPENDIX

GENERAL INFORMATION

APPENDIX

3. SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN THE SHARE CAPITAL OF THE COMPANY

Long Positions in Shares of the Company

APPENDIX

APPENDIX

APPENDIX

Name of Common Director

Name of Company

Name of Common Director

Name of Company

4. SERVICE CONTRACTS

5. COMPETING BUSINESS INTERESTS OF DIRECTORS

6. PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

7. INDEPENDENT FINANCIAL ADVISER

Name Qualification

8. CONSENTS

9. NO MATERIAL ADVERSE CHANGE

10. MISCELLANEOUS

Power Assets Holdings Limited Proxy Solicitation & Information Statement 2008

�� Hongkong Electric Holdings Ltd.