HONG KONG: Shares in CK Hutchison soared 25 per cent in Hong Kong on Wednesday (Mar 5) after it agreed to sell its lucrative Panama Canal ports to a US-led consortium under fierce pressure from US President Donald Trump.
The firm owned by Hong Kong billionaire Li Ka-shing said it would offload a 90 per cent stake in the Panama Ports Company (PPC) and sell a slew of other non-Chinese ports to a group led by giant asset manager BlackRock.
The sellers will receive US$19 billion in cash, the company said in a statement.
Hutchison subsidiary PPC has for decades run ports at Balboa and Cristobal on the Pacific and Atlantic ends of the interoceanic waterway.
But since taking office in January, Trump has complained that China controls the canal – a vital strategic asset that the United States once ran.
“To further enhance our national security, my administration will be reclaiming the Panama Canal, and we’ve already started doing it,” he said in a speech to Congress Tuesday. “We’re taking it back.”
Trump had refused to rule out a military invasion of Panama to regain control, sparking angry protests and a complaint to the United Nations by the Central American nation.
In a joint press release with the buyers, Hutchison said the deal was motivated by business, not politics.
“I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports,” co-managing director Frank Sixt said.
“This transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received,” said Sixt, who described the chosen agreement as “clearly in the best interests of shareholders.”
BlackRock CEO Larry Fink said the transaction demonstrated his consortium’s capacity to “deliver differentiated investments for clients”.
“These world-class ports facilitate global growth,” he added.
The Panamanian government, for its part, said the sale was “a global transaction, between private companies, driven by mutual interests”.
It added that an audit launched into the PPC by the Panamanian comptroller’s office that oversees public entities will continue in spite of the sale.
