[CANBERRA] US private equity firm Cerberus Capital Management is preparing a bid for the strategically important Port of Darwin, currently owned by Chinese firm Landbridge Group, The Australian newspaper reported.
Cerberus is readying a proposal to buy the 99-year lease from Landbridge at a price slightly above the A$506 million (S$421 million) the Chinese company paid for it in 2015, the newspaper said late on Monday (May 26). Landbridge is possibly open to offers around A$1 billion, The Australian cited an unidentified official as saying.
New York-based Cerberus has links to the Trump administration, with co-founder Steve Feinberg appointed to be US deputy defence secretary in March. The Australian said Cerberus declined to comment on Monday.
The decision to lease the Port of Darwin to Landbridge in 2015 was controversial at the time, with then-US President Barack Obama expressing concern. Moves by the centre-left Labor government to bring the port back into Australian hands have ramped up in recent months, with Prime Minister Anthony Albanese pledging during the recent election campaign to potentially nationalise the important asset if a buyer could not be found.
The Port of Darwin is Australia’s most northern maritime facility and sits just south of Indonesia and South-east Asia more broadly. It is located in close proximity to military facilities which house rotations of US marines on deployment to the Northern Territory.
Labor lawmaker Luke Gosling, who represents the city of Darwin, told Bloomberg in May that the decision to sell the port in 2015 “bordered on treasonous” and signalled there were international buyers who were interested in purchasing the lease off Landbridge.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“I have been in discussions with proponents for many months,” Gosling said in a May 15 interview. “Some of those proponents are, won’t be surprising to anyone, they are a mixture of very large defence industrial companies with Australian footprints and entities.”
Gosling said there was “serious commercial interest” in the port and that it wouldn’t be a case of the government “desperately trying to find someone who wants to do it”. He added that it will be a question of “who gives the best value to the Australian taxpayer.”
Growth focus
Terry O’Connor, non-executive director for Landbridge in Australia, said there had been no “offers or engagement from the government at any level”, in a statement to Bloomberg on Tuesday. “It is business as usual at Darwin Port, as we continue to focus on the growth of our operations.”
Relations between Australia and China have dramatically improved in the three years since the election of Albanese’s government in May 2022, including the lifting of trade curbs imposed by Beijing at the height of tensions during the Covid-19 pandemic.
However, recent developments have tested the stabilisation of ties, including the People’s Liberation Navy conducting live-fire exercises off Australia’s heavily populated east coast in February.
China’s Ambassador to Australia, Xiao Qian, warned Canberra in a statement released on Sunday to tread carefully in its decision-making around the Port of Darwin lease, saying Landbridge had made “significant investments” in the facility.
“Such an enterprise and project deserves encouragement, not punishment. It is ethically questionable to lease the port when it was unprofitable and then seek to reclaim it once it becomes profitable,” Xiao said in the statement.
An editorial published in China’s state-run Global Times newspaper warned that if Australia forcibly removed the lease from Landbridge, it would create “major enduring pitfalls for the country”.
Ports have become a new battleground between the US and China in their trade war. Among those ensnared by the confrontation is Hong Kong billionaire Li Ka-shing, who’s seeking to sell 43 ports around the world – including two in the strategic Panama Canal – to a group backed by US investment firm BlackRock for over US$19 billion in cash.
While Li’s CK Hutchison Holdings has told investors that Italian billionaire Gianluigi Aponte’s family-run business is the “main investor” in the consortium, Bloomberg reported last month that BlackRock will control the two Panama ports.
While talks on the deal are ongoing, CK Hutchison has already missed a target to sign a definitive agreement on the Panama part of the deal by Apr 2. BLOOMBERG
