January 27, 2023

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Exclusive-Temasek’s PSA explores multi-billion dollar exit from Hutchison Ports-sources By Reuters

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© Reuters. FILE PHOTO: The skyline of Singapore’s central business district is seen at dusk with PSA international port terminal in the foreground. Picture taken September 25, 2013. REUTERS/Edgar Su/File Photo

By Anshuman Daga

SINGAPORE (Reuters) -Port operator PSA International, fully owned by Singapore state investor Temasek Holdings, is considering selling its multi-billion dollar, 20% stake in the ports business of CK Hutchison Holdings, two sources familiar with the matter told Reuters.

PSA, the world’s second-biggest container terminal operator, whose global network encompasses 160 locations in 42 countries, had acquired the stake in the Hong Kong-based conglomerate’s ports business for $4.4 billion in 2006. PSA was not immediately able to provide comment to a Reuters query. Both Temasek and CK Hutchison, the conglomerate of retired billionaire Li Ka-shing, declined to comment.

PSA is in the early stages of evaluating an exit from CK Hutchison’s ports business and some potential bidders have been tapped, said the sources, who did not want to be identified due to the sensitivity of the matter.

Reuters was not immediately able to ascertain the estimated valuation of PSA’s stake being offered for sale.

The sources said PSA’s move comes as it reviews its portfolio in the backdrop of muted global shipping activity.

One of the sources said he expects port operators, mainly from China, shipping liners and cash-rich global infrastructure funds to be among the potential bidders.

CK Hutchison’s ports division is one of the world’s largest port operators but its mainstay Hong Kong business has been facing tough competition from mainland Chinese ports in the last few years. Last month, U.N. agency UNCTAD forecast global maritime growth for 2023-2027 at an annual average of 2.1%, down from the previous three-decade average of 3.3%, with slow economic growth and the conflict in Ukraine hurting the outlook for trade.

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