HK firm to sell Panama ports' stake amid Trump pressure

Hong Kong firm CK Hutchison is selling its controlling stake in a unit that operates Panama ports to a group including BlackRock, it says as the administration of US President Donald Trump piles up pressure to curb Chinese influence in the region.

The sale of licences will result in the consortium gaining a 90 per cent stake in Panama Ports Company, which is the operator of Balboa and Cristobal ports in the country.

CK Hutchison has been operating the ports at the canal's Pacific and Atlantic entrances for more than two decades.

Although it is not financially tied to the Chinese government, Hong Kong firms are subject to state oversight.

The canal, the world's second busiest interoceanic waterway, is key to global trade flows and critical for US trade as two-thirds of goods passing through the channel are headed into or out of the United States.

The sale of Panama ports licences held by the unit of billionaire Li Ka-shing's conglomerate to a consortium that includes BlackRock, Global Infrastructure Partners and Terminal Investment will give it control of an 80 per cent interest in Hutchison Ports for an equity value of $US14.21 billion ($A22.82 billion).

It will get control of 43 ports comprising 199 berths in 23 countries while delivering cash proceeds in excess of $US19 billion for the Hong Kong-based consortium.

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, CK Hutchison said.

The consortium said has agreed that negotiations will be on an exclusive basis for a period of 145 days, the company said.

In January, US Senator Ted Cruz, the Republican chair of the Senate Committee on Commerce, Science and Transportation, raised concerns that Chinese authorities could exploit or block passage through the canal and that the ports "give China ready observation posts" to take action.

"This situation, I believe, posts acute risks for US national security," Cruz said.

US Secretary of State Marco Rubio visited Panama in early February and told President José Raúl Mulino that Panama had to reduce Chinese influence over the canal or face potential retaliation from the US.

Mulino rejected the idea that China had any control over canal operations.

Panama quit China's Belt and Road Initiative following Rubio's visit, drawing condemnation from officials in Beijing.

But while much attention was focused on Trump's threat to retake control of the canal, his administration trained its sights on Hutchison Ports, the Hong Kong-based consortium that manages the key ports at either end of the canal.

Hutchison Ports had recently been awarded a 25-year no-bid extension to run the ports but an audit looking at that extension was already underway.

Observers believed the audit was a preliminary step toward eventually rebidding the contract but rumours had swirled in recent weeks that a US firm was being lined up to take over.

with AP