The deadline for CK Hutchison’s plan to sell most of its port operations looks likely to be extended from Sunday (July 27) as political negotiations on the $23 billion deal have not been resolved.
Hong Kong Enterprise Group signed Transactions for sale of 43 ports in 23 countriesFrom Panama to China and many other parts of the world, sources with MSC, a shipping company close to BlackRock and Italian billionaire Gianluigi Aponte, told Reuters it won’t be done anytime soon.
This is because the sale has become highly politicized amid the escalating U.S.-China trade war. As Beijing pushes big chunks of cake and has the ability to break deals, this means political marginal systems will continue.
See also: Reasons for the United Nations Court to act inaction on states
Under the terms of March, negotiations for the deal are exclusive foundations for CK and Hutchison controlled by Hong Kong tycoon Li Ka-Shing and are under the terms announced in March until Sunday.
However, negotiations for the deal are unlikely to collapse if the two parties do not sign the agreement by Sunday, as three people close to the port to the characteristics of the conglomerate said the parties could extend the deadline to continue exclusive negotiations.
The first part of the deal – a certainty document for the sale of two port operations near the Panama Canal – the April 2 deadline in the sales announcement was also not signed.
Because of the sensitivity of the matter, people refused to name it. Blackrock also declined to comment, while CK Hutchison was the main investor in the consortium in May said CK Hutchison and MSC Mediterranean Transportation did not respond to requests for comment.
Trump is eager to “take back” 2 Panama port
US President Donald Trump calls the deal “retrieval” of the Panama Canalafter his administration had called for the removal of what it said was China’s ownership of two ports near the canal.
But in April, China’s top market regulator said it was closely following sales of CK Hutchison plans, and that parties to the deal should not try to avoid antitrust scrutiny.
Beijing’s position on the planned deal was made public after Pro-China Media initiated criticism, saying China has a great national interest in the deal Betrayal to the country.
“I don’t think it’s very optimistic that they can sell the port directly to the consortium right now,” said Jackson Chan, senior manager of global fixed income at FSMONE, which owns clients of CK Hutchison Bonds.
“The market has digested this news and I won’t be shocked even if I announce that it will no longer sell next week because the market knows it won’t have a significant impact on its operations.”
Cosco seeking veto
Two days after the deal was announced in early March, CK Hutchison shares jumped 33%, removing all earnings in mid-April. But since then, as the broader Hong Kong market index grows, it has regained its lost stance.
The prospects of the deal have further clouded the shadow in recent days, with another source telling Reuters that China’s port operator China Cosco Shipping Corp (Cosco) also hopes to join the consortium to purchase ports Business.
Bloomberg News reported that COSCO demanded veto power or equivalent power in the entity, which will report this week that it will occupy 43 ports in CK Hutchison.
Cosco did not respond to a request for comment.
CFRA Research analyst Cathy Seifert said the existing consortium could allow Cosco to enter the deal.
“In my opinion, the greater risk of reaching a deal is likely to be the Trump administration, which could prevent deals, including China,” the New Jersey-based analyst said.
Ballingal Investment Advisors strategist David Blennerhassett, published on the independent online research platform Smartkarma, said adding Cosco to the consortium could anger Trump.
“Trump already has several problems on his plate,” he said.
- Jim Pollard’s additional editor Reuters
See also:
China melts potential melting in the bargaining war, softening our connections
China threatens to stop Panama port transactions, “want Cosco shares”
Trade agreement is signed, but China still releases rare earths
China warns CK Hutchison, BlackRock: Beware of port transactions
Trump’s tariff war broke the trans-Pacific trade in goods
Panama Port Trading Cloud: China Slams Hong Kong Owners Sold Out
China and CK and Hutchison “seek to resolve $23 billion in port deals”
U.S. port fee proposals exacerbate U.S.-China trade fear
Trump praises $23 billion Blackstone for buying Hong Kong giants’ port
Chinese ships may face substantial fees to enter U.S. ports
US investigation shows that China is unfairly dominant: Source
