Li Ka-shing mulls new ownership terms to complete ports deal

[HONG KONG] Billionaire Li Ka-shing’s CK Hutchison is renewing efforts to sell dozens of ports to a global consortium, by splitting the deal into separate parcels with different ownership structures, sources said.The arrangement could give China Cosco Shipping larger stakes of ports in regions that are more friendly with China, such as Africa. At the same time, other parties in the consortium, including Italian billionaire Gianluigi Aponte’s Terminal Investment and US investment firm BlackRock, may have greater control elsewhere, said the sources, who asked not to be identified discussing private matters.China has signalled to state-owned Cosco that the government would find such a structure acceptable, said a source. The US’ January capture and removal of Venezuela’s leader Nicolas Maduro has also added to the sense among officials in Beijing that uncertainty is growing in Latin America, they added.The discussions remain preliminary and details are yet to be finalised, the source said.CK Hutchison declined to comment. Cosco, BlackRock and the Aponte family’s MSC Mediterranean Shipping, which controls Terminal Investment, did not immediately respond to requests for comment.The sale, which covers 43 ports including two along the strategic Panama Canal, has been progressing slowly, with Cosco’s role a main sticking point in the negotiation, it was reported in December. Deal makers are splitting the deal into smaller parcels to ease regulatory concerns across jurisdictions and keep talks moving, even as uncertainty looms in Panama, where the authorities are contesting CK Hutchison’s rights to operate the two facilities amid US pressure.The latest development highlights the mounting geopolitical headwinds facing CK Hutchison’s ports sale, as US President Donald Trump flexes his influence abroad, pressuring Latin America and asserting claims over Greenland.That has intensified its rivalry with China, which has been pushing for a bigger role for Cosco in the deal to defend the country’s interest in strategic locations such as Panama.CK Hutchison invited state-owned Cosco into the consortium last year seeking to secure Beijing’s approval, after China denounced the deal as bowing to US pressure and undermining its global trade and shipping ambitions. Trump has cast the sale of the two Panama ports as a win for US influence in the waterway.Cosco had previously demanded veto rights or equivalent powers in the entity taking over all 43 ports.Panama’s top court is set to make a decision on local authorities’ challenge against CK Hutchison soon. A ruling against the conglomerate might trigger a reaction from China or the US that could hinder the entire transaction, despite ports elsewhere being less politically fraught.The sale of the 43 ports is expected to net CK Hutchison more than US$19 billion in cash. The Panama facilities account for about 4 per cent of the total value, it was reported.Before Cosco joined the consortium, China had vowed to scrutinise the deal on antitrust and national security grounds. Beijing also ordered its state-owned firms to halt collaboration with the Li family, which stalled scion Richard Li’s efforts to expand his insurance business into the mainland.Under the agreement’s original structure, BlackRock’s Global Infrastructure Partners was to own 51 per cent of the two Panama ports while Terminal Investment would take the remaining 49 per cent, it was reported last year. Terminal Investment was also slated to acquire the remaining 41 ports. BLOOMBERG