CK Hutchison Confirms Delay In Controversial $19 Billion Global Ports Deal

CK Hutchison Holdings Ltd. has confirmed that its planned sale of global ports to a BlackRock Inc.-backed consortium will not be completed this year, even though negotiations are still moving forward.

The announcement was made by co-managing director Frank Sixt during an analysts’ briefing held after the release of the company’s interim earnings results on Thursday. He explained that the transaction is highly complex as it involves 43 ports worldwide, including two located at the strategic Panama Canal.

The sale, if completed, is expected to bring in more than $19 billion in cash for the Hong Kong conglomerate established by billionaire Li Ka-shing.

Sixt said the deal had entered a new stage with the inclusion of a Chinese investor in discussions. According to him, there was a reasonable chance that these talks could result in an agreement that would benefit all parties and also secure approvals from the relevant authorities.

The deal has attracted global attention because of its geopolitical sensitivity. US President Donald Trump described the potential sale as a win in securing influence over the Panama Canal. On the other hand, Beijing expressed strong displeasure, viewing the move as a betrayal and as CK Hutchison giving in to American pressure.

The company has already missed a deadline to reach a binding agreement before the exclusive negotiation period with the BlackRock-led consortium expired in late July.

Sources familiar with the matter said state-owned China Cosco Shipping Corp. was seeking a major role as a condition for joining the group, which also includes Italian billionaire Gianluigi Aponte’s Terminal Investment Ltd.

Sixt acknowledged that the talks have taken longer than expected but did not consider the delay a serious issue. He added that CK Hutchison’s ports division has been performing well this year.

For the first half of the year, ports and related services generated a 9% rise in revenue, while earnings before interest, taxes, depreciation and amortisation grew by 10%. The increase was driven by higher cargo throughput and storage income across several regions, including mainland China, Asia, the Middle East, Mexico, and Europe.

Reference: Bloomberg

Source: Maritime Shipping News