Port operator PSA International, fully owned by Singapore state investor Temasek Holdings, is considering selling its multi-billion dollar, 20 per cent stake in the ports business of CK Hutchison Holdings, two sources familiar with the matter told Reuters.

PSA, the world’s second-biggest container terminal operator, whose global network encompasses 160 locations in 42 countries, had acquired the stake in the Hong Kong-based conglomerate’s ports business for US$4.4 billion in 2006.

PSA was not immediately able to provide comment to a Reuters query. Both Temasek and CK Hutchison, the conglomerate of retired billionaire Li Ka-shing, declined to comment.

PSA is in the early stages of evaluating an exit from CK Hutchison’s ports business and some potential bidders have been tapped, said the sources, who did want to identified due to the sensitivity of the matter.

Reuters was not immediately able to ascertain the estimated valuation of PSA’s stake being offered for sale.

The sources said PSA’s move comes as it reviews its portfolio in the backdrop of muted global shipping activity.

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One of the sources said he expects port operators, mainly from China, shipping lines and cash-rich global infrastructure funds to be among the potential bidders.

CK Hutchison’s ports division is one of the world’s largest port operators, but its mainstay Hong Kong business has been facing tough competition from Chinese ports in the last few years.

Last month, UN agency Unctad forecast global maritime growth for 2023-2027 at an annual average of 2.1 per cent, down from the previous three-decade average of 3.3 per cent, with slow economic growth and the conflict in Ukraine hurting the outlook.

Besides the stake’s valuation, a successful deal would depend on whether the buyers are acceptable to all parties, one of the sources said, adding that securing regulatory approvals from a number of countries was another key factor.

If a deal is reached, it could rank among the biggest selldowns by a Temasek entity. Temasek reported a nearly 6 per cent rise in its portfolio value to a record S$403 billion in the year to March 2022.

Temasek executives had said in June that the sovereign investor expects to slow down its investments due to the deteriorating global economy. Economic conditions have worsened since then, with global markets selling off along with a sharp increase in interest rates. REUTERS