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Hutchison Whampoa Limited
Of equal significance to the group's longer term recovery was the fact that during 1976 Mr Wyllie set about increasing HIL's shareholding in a number of public companies in which the group had formerly held only associate or minority interests. The most important of these by far was the HONG KONG and WHAMPOA DOCK Co. (HWD) in which HIL's shareholding was increased from 30% to just over 50% through shares purchased on the open market in order to make it a subsidiary.
At the end of an extraordinarily busy and eventful 1976, Mr Wyllie was able to announce that the now much slimmed down and streamlined HIL was well on its way back to full financial health and recovery with a consolidated profit after taxation, minorities, extraordinary and prior year items of HK$122.8 million. Mr Wyllie's interest in HWD lay principally in the fact that it had a much stronger balance sheet and assets than HIL. As the oldest registered company in Hong Kong - in fact it had business registration number 1 - HWD had started life as a dock company, but in more recent years while continuing this business it had also expanded into property, warehousing, container terminal and transport operations. It had little debt and a huge land bank, much of which was still carried on its books at the original pre-war cost.
Further purchases of shares for cash were out of the question. While HIL had been able to make HWD a subsidiary through the careful accumulation of shares in the stock market, any further attempts to increase the holding in this manner were bound to push the price out of reach and, furthermore, such buying could only be met by an increase in HIL's debt. Something Mr Wyllie and his management team in head office had been able to avoid in 1976. The possibility of a reverse take-over using HWD to acquire HIL was rejected as impractical because certain of the directors on HWD's Board were considered to be hostile to HIL, and there was uncertainty about the ability to achieve the level of control that Mr Wyllie was aiming for over the expanded group. Finally, the merchant bank, SCHRODERS & CHARTERED, who had been retained to advise HIL in this matter, suggested the formation of a new holding company which would make it possible for HIL and HWD to be merged.
This concept, which was much easier to describe than it was to achieve, ultimately led to the formation of HUTCHISON WHAMPOA LIMITED (HWL) and before the end of 1977 Mr Wyllie and his team had completed what, until then, was the largest and most complex merger ever achieved in Hong Kong.
Shortly after the completion of the merger Mr Wyllie was appointed as Chairman and Chief Executive of HWL, which emerged as one of Hong Kong's largest conglomerates with wide-ranging interests in property development, commodity trading, supermarkets, textiles, container terminal operations, newspapers, the Cross Harbour Tunnel, dockyards, quarrying, construction and civil engineering.
HWL grew rapidly, recording profits of HK$217.9 million in 1977, HK$267 million in 1978, HK$538 million in 1979 and HK$734 million in 1980. During this time the Group's market capitalisation increased to HK$8.1 billion, a value which was in stark contrast to the HK$384 million market capitalisation of HIL at the time of Mr Wyllie's appointment.
At the end of 1979, the Hong Kong Bank accepted a controversial deferred payment offer for its shareholding in HWL from Mr Li Ka Shing, the Chairman of CHEUNG KONG (Holdings) Ltd, a major property developer. Mr Li continued to increase his shareholding in HWL, and early in 1981, with the group well on the way to reporting its first HK$1 billion profit, Mr Wyllie announced his resignation as Chairman and Chief Executive in favour of Mr Li.
Mr Wyllie also announced that, having achieved the objectives set out at the time of his appointment as Chief Executive of HIL, he planned now to concentrate on the further development of his private company, ASIA SECURITIES LIMITED (ASL). At that time ASL's interests already included high-technology electronics, financial services and investment dealings and considerable property holdings in Hong Kong, the U.S.A. and Australia.