Moody's: Spin-off good for Hutchison Whampoa

Moody's Investors Service said that plans by Hutchison Whampoa Ltd. to spin off some of its port assets to Hutchison Port Holdings Trust are credit positive.

According to the company, Hutchison Whampoa will maintain a stake of about 25% in the trust and continue to manage these assets under a management contract, the agency said.

The company's port business is part of a global portfolio and is one of the group's key contributors, generating stable cash flow, Moody's said.

The financial impact of this proposed transaction is uncertain at this point, the agency said. But, the company has a history of monetizing its assets at strong valuations, Moody's said. The potential cash inflow would significantly reduce its reported net debt at the outset, the agency said.

On the other hand, some of these ports are currently majority-owned and will be deconsolidated from the company's accounts in the spin-off, Moody's added.

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