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Hong Kong firm to sell stake in Panama canal ports amid Trump pressure Hong Kong firm to sell stake in Panama canal to US financial giant BlackRock
(about 3 hours later)
CK Hutchinson Holdings says 80% stake sale to consortium unrelated to Trump claims of Chinese control of canal The deal, valued at almost $23bn, comes amid Trump pressure to curb perceived influence of China over the canal
CK Hutchison Holdings, the Hong Kong-based logistics giant, announced plans for investors including BlackRock Inc to buy an 80% stake in a business that controls ports in Panama for an equity value of $14.21bn. CK Hutchison Holdings, the Hong Kong-based logistics giant, announced plans to sell a majority stake in a business that controls ports in Panama to investors including the US financial giant BlackRock in a deal worth almost $23bn.
The sale of 90% interest in Panama Ports Company, which owns and operates the ports of Balboa and Cristóbal, comes as the US president, Donald Trump, piles on pressure to end what he sees as China’s influence and control over the Panama canal. The sale of a 90% interest in Panama Ports Company, which holds the contract to run the ports of Balboa and Cristóbal until 2047, comes as Donald Trump piles on pressure to end what he sees as China’s influence and control over the Panama canal.
The deal – one month after US secretary of state Marco Rubio’s visit to Panama City – represents a swift and significant victory for the US president’s aggressive negotiations towards Panama.
Following his conversations with Panamanian president José Raúl Mulino, Rubio declared that “control of the Chinese Communist party over the Panama Canal” was unacceptable and that the US would use “measures necessary to protect its rights”.
CK Hutchison insisted the deal was unrelated to Trump’s vow to “take back” the canal. “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,” said co-managing director Frank Sixt.CK Hutchison insisted the deal was unrelated to Trump’s vow to “take back” the canal. “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,” said co-managing director Frank Sixt.
The company has been operating the ports of Balboa and Cristóbal at the canal’s Pacific and Atlantic entrances for more than two decades. Other ports in the canal are operated by firms from the US, Taiwan and Singapore. Few in Panama believe this.
The sale does not involve any interest in Hutchison Port Holdings Trust, which operates ports in Hong Kong and Shenzhen, as well as South China, or any other ports in mainland China, the company said. In the past two weeks Panama has also taken in third-country migrants deported from the US, as part of an agreement made with Rubio, and greenlit a contentious dam project that would provide more water to the Canal.
The consortium, which includes BlackRock Inc, Global Infrastructure Partners, and Terminal Investment and CK Hutchison has agreed negotiations will be on an exclusive basis for a period of 145 days, the company said. Mauricio Claver-Carone, Trump’s special envoy to Latin America had previously told Politico that the canal risked becoming “obsolete” due to Panama’s failure to properly maintain the canal and tackle low water-levels that limited transits.
Reuters contributed reporting “Trump aimed at the heart of the country, the Panama canal,” says Nehemías Jaén, a former Panamanian diplomat. “He never intended to take it. Every concession that Panama makes is a win for him.”
Few Panamanians will mourn the departure of Panama Ports. In recent months, clips of the comptroller general announcing that the company had not paid “one cent” to the government over the last three years, have gone viral on social media.
Many Panamanians believe that corrupt politicians struck sweetheart deals for operation of the port.
“This is good for Panama and for the world,” says Mario Perez Balladares, director of a transshipment company, adding that he expected container volumes to increase at the ports in the wake of the decision.
But there could be a long term negative impact on Panama’s image, according to Jaén. Just six days ago, the attorney general said he considered the contracts for the Balboa and Cristobal ports to be unconstitutional, opening the possibility that the contracts could be rescinded by Panama’s supreme court.
With the purchase of Panama Ports by a US company, that legal case now looks unlikely to proceed, giving the impression that Panamanian institutions bend to US pressure rather than their own laws.
“This is creating a very negative perception of Panama in terms of investor protection,” says Jaén. “Panamanians don’t want to be considered a US colony again.”