State Grid Corporation of China is the largest state-owned electric utilities company in the world. Photo: IC

Li Ka-shing's Power Assets Holdings said on Sunday it received initial commitments worth nearly $1.34 billion from two investors for a Hong Kong initial public offering of its electricity business.

Power Assets will spin off the business into HK Electric Investments, a single-investment trust, offering 4.43 billion units in an indicative range of HK$5.45-HK$6.30 each, the company added in a filing to the Hong Kong stock exchange. That would put the deal at up to HK$27.91 billion ($3.6 billion).

Government-owned State Grid Corp of China agreed to make the largest commitment as a cornerstone investor, pledging up to HK$10 billion, while Oman Investment Fund agreed to buy HK$387.5 million, the filing said.

Cornerstone investors receive a guaranteed allocation in exchange for agreeing to retain their stakes for a set period.

Cornerstone investments in IPOs are an Asian phenomenon whereby certain funds or high-net-worth individuals commit to buying a specific number of shares at the IPO price and in return agree to stay invested in the company for between 6 to 12 months after the listing.