SINGAPORE — PSA International, port operator fully owned by Temasek Holdings, has been considering selling its 20 per cent stake in Hong Kong-based CK Hutchison‘s port business, according to Reuters’ report.
In 2006, PSA acquired the stake in CK Hutchison’s ports business for US$4.4 billion.
But two sources told Reuter that PSA is in the early stages of evaluating an exit from CK Hutchison’s ports business, and some potential bidders have been tapped.
One of the sources speculated that port operators, mainly from China, shipping liners, and cash-rich global infrastructure funds to be among the potential bidders.
The source claimed that the reason for PSA’s move comes as it reviews its portfolio in the backdrop of muted global shipping activity.
Reuter reported that PSA was not immediately able to provide comment on the matter, while both Temasek and CK Hutchison declined to comment.
The United Nations Conference on Trade and Development (UNCTAD) had earlier warned that the pace of global shipping activity is set to lose steam next year as economic turmoil, conflict in Ukraine, and the impact of the pandemic weaken the outlook for trade.
The slowdown is expected to impact shipping, which transports more than 80% of global trade, although tanker freight rates could stay high.
UNCTAD forecasts global maritime growth for 2023-2027 at an annual average of 2.1%, down from the previous three-decade average of 3.3%.
Formerly the Port of Singapore Authority, PSA is currently the world’s second-biggest container terminal operator, whose global network encompasses 160 locations in 42 countries.
CK Hutchison, the flagship conglomerate of Li Ka-shing’s group, its port 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.
