CK Hutchison Holdings Ltd., owned by billionaire Li Ka-shing, is still aiming for a $23 billion sale of its global ports business, despite the recent loss of its Panamanian port operations. This move comes as the company continues to grapple with the fallout from Panama's cancellation of port concessions and a diplomatic dispute involving US President Donald Trump's objections to Chinese ownership of ports along the Panama Canal.
The conglomerate reported a 1% drop in port throughput but a 4% increase in EBITDA to HK$9 billion ($1.15 billion) in the first half of the year, despite a HK$496 million hit from the Panama situation. CK Hutchison is actively seeking over $2 billion in damages from Panama through arbitration, disputing the removal of its operations after nearly three decades at the two key ports near the Panama Canal. This legal battle has complicated the planned sale to a consortium that includes BlackRock Inc., Terminal Investment Ltd. (an affiliate of MSC), and China Cosco Shipping Corp.
To move the deal forward, CK Hutchison is exploring a revised ownership structure, potentially splitting the sale into separate parcels. This new arrangement could allow China Cosco Shipping Corp. to hold larger stakes in ports located in regions more amenable to Chinese investment, such as Africa. Other consortium members like Terminal Investment Ltd. (linked to Italian billionaire Gianluigi Aponte) and BlackRock Inc. might gain greater control in other regions, accommodating regulatory and geopolitical concerns.
Despite the complexities and the lack of progress reported on the transaction by Group Finance Director Frank Sixt, CK Hutchison recorded a 6.7% rise in underlying profit to HK$12.6 billion ($1.61 billion) in the first half of the year, boosted by strong performance in its retail division. The company remains committed to the sale at its original valuation while navigating the legal and geopolitical challenges associated with its Panamanian assets.
