The Panama Maritime Authority will demand all legal and financial documents related to the deal between CK Hutchison and a BlackRock-backed consortium, according to Panamanian Minister Juan Carlos Orillac, reports Reuters.
Buying Stakes
BlackRock, a U.S. company, announced an agreement to acquire a significant portion of CK Hutchison’s port business, a Hong Kong-based conglomerate. This acquisition includes CK Hutchison’s 90% stake in Panama Ports Company, which operates the strategically important Balboa and Cristobal terminals near the Panama Canal.
- The Panama Maritime Authority will review the transaction at the request of the cabinet to ensure the protection of public interest in the terminals.
- A separate audit of CK Hutchison’s port concession, renewed in 2021, is still being conducted by Panama’s Comptroller General office.
- The overall deal involves CK Hutchison’s 80% stake in Hutchison Ports, with an equity value of $14.21 billion. However, CK Hutchison will receive over $19 billion after shareholder loan repayments.
Reclaiming the Panama Canal
Concerns have been raised by U.S. lawmakers about CK Hutchison’s control of Panama ports, citing potential security risks to the Panama Canal’s operations and referencing statements by Trump about taking over the waterway.
It’s important to note:
- The ports in question are distinct from the Panama Canal itself and are not necessary for vessels to transit the canal.
- The Panama Canal is operated by an autonomous Panamanian entity.
- The Panama Maritime Authority oversees the ports and Panama’s vessel registry.
Following the deal, Trump told the U.S. Congress his administration was “reclaiming the Panama Canal” and that they had already started.
Panamanian President Jose Raul Mulino responded by saying that Trump was “once again lying,” and that the Panama Canal is, and will remain, Panamanian.
Daniel Isaza, head of Panama’s business chamber Consejo Empresarial Logistico, believes the CK Hutchison-BlackRock deal could promote the expansion of Panama’s port infrastructure. He points out how the prior administration of the Balboa port had been opposed to additional port construction. He sees new investments to increase port capacity as a positive outcome for the country.
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Source: Reuters
