By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Uncertainty prevailed last night over whether the Freeport Container Port and 50 percent ownership in the Freeport Harbour Company are included in CK Hutchison Holdings’ multi-billion dollar global ports deal.

The Hong Kong-based conglomerate, unveiling its net $17.165bn exit from international ports operations via their proposed sale to a consortium featuring its long-time partner, Mediterranean Shipping Company (MSC), and Blackrock, the world’s largest asset manager, said the agreement involves some 43 ports spread across 23 different countries.

With operations in China and Hong Kong not included in the deal, subtracting these from all the ports listed on Hutchison Port Holdings’ website leaves the same number of facilities and countries as detailed in the statement announcing the deal. To reach the 43 ports and 23 countries number, the Freeport Container Port would have to be included in the sale but this could not be confirmed before press time last night.

The Hutchison Port Holdings’ website also denoted Freeport Harbour Company as being part of its Bahamian port operations, implying that this is also included in the sale. Freeport Harbour Company, though, is a 50/50 joint venture between Port Group Ltd, the Grand Bahama Port Authority (GBPA) affiliate, and Hutchison in which the latter has Board and management control.

A well-placed GBPA source, speaking on condition of anonymity, indicated there had been no advance warning of the deal - and whether Freeport Harbour Company is included or not - from Hutchison as they were learning of the announcement at the same time as Tribune Business. However, other contacts suggested that the relationship between the GBPA and Hutchison is not a strong one at presence.

Multiple attempts were made to reach Godfrey Smith, the Freeport Container Port’s chief executive, for clarification and comment, but Tribune Business was informed its entire management team was in meetings and no reply was received before press time. This newspaper was told a representative would reach out at a later time.

Ginger Moxey, minister for Grand Bahama, also did not respond to written messages seeking comment. Staff at the Ministry of Grand Bahama indicated she was attending Cabinet meetings yesterday. The Bahamas Investment Authority (BIA), meanwhile, said no application seeking government approval for a change in ownership at Freeport Container Port or Freeport Harbour Company had been submitted before press time.

Blackrock, which oversees $11.5 trillion in assets and is regarded as the world’s largest investment firm, has partnered on the deal with Terminal Investment Ltd, the port operations and infrastructure arm for MSC. The latter has long been Hutchison’s partner in the Freeport Container Port, and also the facility’s main customer, while also acting as a key cargo freight and logistics provider to Nassau and New Providence.

MSC has also teamed with Royal Caribbean, ITM Group and Freeport Harbour Company on Freeport Harbour’s long-planned redevelopment. And, together with Royal Caribbean and Freeport Harbour Company, it is also aiming to transform Billy Cay into a new cruise port and amusement park.

Several sources, speaking to Tribune Business on condition of anonymity, suggested that any Freeport Container Port takeover by the combination of MSC and Blackrock could revive the former’s long-standing interest in the city and wider Grand Bahama.

And they argued that this could also boost the Government in its ongoing $357m arbitration claim against the Grand Bahama Port Authority (GBPA) given previous suggestions that it was seeking to line up MSC as a potential private sector buyer of the quasi-governmental authority’s key economic assets such as the Freeport Harbour Company and Grand Bahama Development Company (DevCo).

Hutchison’s exit from all non-China port operations, which has only been agreed ‘in principle’ and has yet to be translated into a binding deal or closed, is likely to have at least been accelerated and influenced by newly-elected US president, Donald Trump’s, hostility to its port operations in the Panama canal zone. Both are included in the proposed sale.

Also included are another “43 ports comprising 199 berths in 23 countries, together with all Hutchison Port Holdings’ management resources, operations, terminal operating systems, IT and other systems, and other assets appertaining to control and operations of those ports”. Subtracting $5bn in existing debt from the $22.8bn gross purchase price delivers the net value of $17.165bn. The deal is supposed to close by April 2.

Diego Aponte, MSC’s president and chairman of Terminal Investments Ltd, said: “Our relationship with Hutchison Ports goes back a long way and is a relationship of mutual respect and friendship. Furthermore, we are very pleased to partner with BlackRock and Global Infrastructure Partners (GIP), with whom we share a long-standing and terrific relationship.

“We have a very high regard toward the Hutchison Ports management team, and if this transaction closes, we look forward to welcoming them into our larger family. We are very focused on this industry, and we know that the investment in Hutchison Ports will be a very viable investment commercially.”

Frank Sixt, co-managing director of C Hutchison, added: “This transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received. As a result, the transaction valuation agreed in principle is compelling, and the transaction is clearly in the best interest of our shareholders.

“After adjusting for minority interests and repayment of certain shareholder loans due from Hutchison Port Holdings to CK Hutchison, the transaction would be expected to deliver cash proceeds in excess of $19bn to our group. I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama ports.

“It must be noted that, however, the transaction does remain subject to confirmatory due diligence, settlement of definitive documentations, and normal and usual completion procedures, adjustments and conditions as well as compliance by Hutchison Port Holdings with the rights of minority shareholders under existing shareholders agreements relating to the sold Hutchison Port Holdings interests.”