CK Hutchison May Delay Signing Panama Ports Deal
[Stay on top of transportation news: .]
Billionaire Li Ka-shing, Hong Kong鈥檚 most famous tycoon, won鈥檛 go ahead with the expected signing next week of a controversial deal to sell his Panama Canal ports to a consortium including BlackRock Inc., according to media reports.
While Li鈥檚 flagship CK Hutchison Holdings Ltd. won鈥檛 sign the deal, which was expected to occur on April 2, it doesn鈥檛 mean the sale has been called off, the South China Morning Post reported, citing a source it didn鈥檛 identify. Significant details remain to be decided due to the complexity of the transaction, it said. Local media outlets including Sing Tao also reported the agreement wouldn鈥檛 be signed.
The Balboa and Cristobal ports on either side of the 51-mile Panama Canal, which connects the Atlantic and Pacific oceans, form a key part of the deal involving a total of 43 CK Hutchison facilities. The Hong Kong conglomerate would net more than $19 billion in cash, should the transaction go through.
It鈥檚 the latest twist in one of the most geopolitically complicated deals ever for the 96-year-old business titan, given the two main users of the Panama canal are the U.S. and China. Beijing鈥檚 concern was that the ports sale could threaten the country鈥檚 shipping and trade interests, while President Donald Trump was celebrating it as the return of the canal back to U.S. control from China.
READ MORE:听Hong Kong Raises Concerns About Deal for Panama Canal Ports
The planned sale had highlighted the political risks for companies based in Greater China amid increasing trade tensions between the world鈥檚 two largest economies.
That鈥檚 despite CK Hutchison having limited exposure to both countries: the conglomerate is registered in the Cayman Islands and accrues only 12% of its revenue from Greater China, while Europe, Canada and Australia make up the bulk of the rest.
The move came after China told state-owned firms to hold off on any new collaboration with businesses linked to Li and his family, and authorities began looking into the transaction for potential security or antitrust violations.
While CK Hutchison has kept ports in Hong Kong and mainland China out of the sale, the deal has been criticized by pro-Beijing newspaper Ta Kung Pao for 鈥渟pineless groveling鈥 to U.S. pressure. In a sign of state backing, the commentaries were reposted by China鈥檚 top office on Hong Kong affairs. The city鈥檚 leader also weighed in, saying concerns over the deal deserved 鈥渟erious attention鈥 and vowing to handle the deal in accordance with the law and regulations.
Want more news? Listen to today's daily briefing above or go here for more info
Pro-Beijing media and individuals affiliated with Chinese authorities stepped up their criticism in the week ahead of the April 2 deadline for the signing of the definitive agreement. Ta Kung Pao ran articles almost every day denouncing the sale, while a spokesman for China鈥檚 Ministry of Foreign Affairs separately said Beijing opposes strong-arm tactics for economic gains.
鈥淐hina has always firmly opposed the use of economic coercion and bullying to infringe upon the legitimate rights and interests of other countries,鈥 the ministry鈥檚 spokesman Guo Jiakun said on March 27.
