HONG KONG (Reuters) - Billionaire Li Ka-shing's Cheung Kong (Holdings) Ltd (HK:0001) is considering a bid for aircraft being sold by private equity firm Terra Firma-owned lessor AWAS Aviation Capital Ltd, a deal which sources said could be worth about $5 billion (2.97 billion pounds).
A successful bid by Li would mark the entry of Asia's richest man into a sector that is attracting long-term global investors such as insurers and pension funds hungry for better returns while interest rates remain low.
AWAS, [AWASA.UL], the aircraft leasing company owned by the British private equity firm, is in talks with potential bidders to sell a portfolio of about 100 newer aircraft, Reuters reported last week.
Li's companies are seeking stable investments in well-regulated markets outside Hong Kong, where expansion opportunities are becoming limited. Just this year, the tycoon's companies have raised about $9 billion by selling stakes in Hong Kong firms and analysts expect a part of the proceeds to be used for buying overseas businesses.
Cheung Kong said on Monday it was at a very preliminary stage in considering the proposed acquisition and no binding agreement had been reached. Cheung Kong shares were down 0.4 percent at HK$143, while the benchmark Hang Seng Index <.HSI> was up 0.4 percent.
"The company has been exploring new investment opportunities to generate additional stable revenue streams to drive forward its growth momentum. The proposed acquisition is one of the many opportunities that have been presented to the company," the property group said in a filing to the Hong Kong bourse.
Industrial and Commercial Bank of China (SS:601398), Bank of China (SS:601988), China Development Bank [CHDB.UL] and Japanese-owned SMBC Aviation Capital are fast expanding in the aviation leasing sector and have emerged as leading global lessors.
(Reporting by Donny Kwok and Anshuman Daga; Editing by Denny Thomas and and Stephen Coates)