Brookfield Asset Management has suspended the sale of a UK port that has been shut down by one of its closest allies Boris Johnson, the mayor of Conservative Tees Valley Ben Houchen.
PD Ports, which operates Teesport in northeastern England, remains in Brookfield after a long hiatus.
The South Tees Development Corporation, which is a subsidiary of Houchen, has been calling for control of PD Ports Brookfield after the sale. For Houchen, the site was an integral part of the government-sponsored freeport plan to revitalize the area.
Brookfield has been selling PD Ports sales for several months, drawing interest from Peel Ports and Macquarie, as well as Houchen’s STDC, which formed a line of Northumberland Estates and Pension Insurance Corporation as sponsors.
“PD Ports is a big business that has done very well under Brookfield’s ownership and continues to hope for long-term growth,” a Brookfield spokesman said. “Recent developments have strengthened our confidence in the business, and we have decided to keep the money in PD Ports instead of selling the product.”
STDC has set aside PD Ports to prevent them from using two-thirds access to Teesport, although the main one is not affected. In May, PD Ports accused the agency of using the lawsuit to “get rid of redemption” to buy the company at a lower price. The company denies this.
Brookfield expected PD Ports to raise £ 2bn. But an STDC source told the Financial Times last month that contributions between £ 1.1bn and £ 1.4bn were “true”.
Buying Ports of PD for more than £ 1.5bn could make it a “millstone” for the company’s neck, according to someone familiar with Peel Port’s approach.
PD Ports’ trading performance was disrupted during the sale, two people familiar with the matter said.
Houchen’s election as Conservative mayor made him a key figure in the party’s decision to seek medical treatment at Labor’s heart in northern England. Experts said last month that his redevelopment plans would be slower and more expensive if he could not afford PD Ports.
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