CK Hutchison will not sign deal to sell strategic Panama ports next week, SCMP reports

(Reuters) -Hong Kong tycoon Li Ka-shing's CK Hutchison will not sign a deal next week to sell its two port operations near the Panama Canal to a BlackRock-led group amid growing pressure from Beijing, the South China Morning Post reported on Friday, citing a source close to the company.

The deal was expected to be signed on April 2, according to the sale announcement made on March 4.

It is understood the situation does not mean the deal has been called off, the South China Morning Post added, citing the source.

CK Hutchison and BlackRock did not immediately respond to a Reuters request for comment.

Chinese authorities have reacted negatively to plans by the conglomerate, while the deal was hailed by U.S. President Donald Trump who wants to retake control of the strategic waterway.

A CK Hutchison unit operates two of the five ports adjacent to the Panama Canal, which manages about 3% of the global sea-borne trade. Panama first awarded the concession to the company in 1998 to run the ports and extended it for another 25 years in 2021.

The telecoms-to-retail conglomerate has been caught in China's crosshairs in the highly politicised deal with a BlackRock consortium, which includes selling assets near the strategically important Panama Canal. The deal is expected to garner the firm more than $19 billion in cash.

Pro-Beijing Hong Kong newspaper Ta Kung Pao said in an editorial piece on March 21 that the transaction should to be scrapped as the deal is a “perfect cooperation” with the U.S. strategy to contain China.

Bloomberg News, earlier in the week, reported that Chinese authorities had told state-owned firms to hold off on any new deals with businesses linked to tycoon Li and his family.

(Reporting by Rishav Chatterjee and Roshan Thomas in Bengaluru; Editing by Savio D'Souza and Shinjini Ganguli)