China’s biggest shipping company is set to join the global consortium that’s acquiring Hong Kong tycoon Li Ka-shing’s overseas ports, and is requesting a powerful role in the group in order to secure Beijing’s blessing for the controversial deal, people familiar with the matter said.
State-owned China Cosco Shipping Corp. is asking to have veto rights or equivalent powers in the entity taking over the 43 ports, including two strategically important ones along the Panama Canal, the people said, asking not to be identified discussing private matters. Cosco has argued such rights are necessary to block any decisions that are potentially harmful to China’s interests, the people added.
Li’s CK Hutchison Holdings Ltd. and the original buyer group, which includes BlackRock Inc.’s Global Infrastructure Partners unit and Italian billionaire Gianluigi Aponte’s Terminal Investment Ltd., have agreed that Cosco should have full informational access to the operation, the people said. But talks are still ongoing as to the powers that Cosco will have in the consortium and no final decisions have been made, they said.
Read: Chinese Firms in Talks to Join Group for Li Ka-Shing’s Ports
A 145-day period for exclusive talks between CK Hutchison and the consortium is likely to lapse on July 27, and details of Cosco’s role in the consortium could be settled by the end of September, some of them said.
Cosco didn’t respond to calls and a faxed request for comments. CK Hutchison and the Aponte family’s MSC Mediterranean Shipping Co., which controls Terminal Investment, didn’t respond to separate requests for comment. BlackRock declined to comment.
Cosco’s demands mark the latest twist for a deal that’s become a proxy for US-China rivalry, after President Donald Trump painted the transaction as the return of Panama Canal to US influence. Chinese regulators have, for their part, vowed to investigate the transaction, and Li and his family have come under intense scrutiny and criticism.
The Hong Kong tycoon’s younger son Richard Li’s talks to expand his insurance business into mainland China have stalled after the ports deal upset Beijing, Bloomberg reported earlier this month. That followed another Bloomberg report in March that China told its state-owned firms to hold off on any new collaboration with businesses linked to the Li family.
The original structure of the buyer consortium was designed to give the Aponte family-controlled Terminal Investment ownership of all the ports except the two in Panama, whose control will go to the BlackRock unit.
With assistance from Silla Brush.
This article was generated from an automated news agency feed without modifications to text.