Anthony Albanese open to American buyer of Darwin port

Anthony Albanese has left the door open for a US private equity giant to buy the Port of Darwin from its Chinese owner, but says he’d prefer it to be ­returned to ‘Australian hands’.

As revealed by The Australian, New York-based Cerberus Capital Management has emerged as a ­serious bidder for the Port of Darwin, above. Picture: supplied

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

Anthony Albanese has left the door open for a US private equity giant to buy the Port of Darwin from its Chinese owner, but says he would prefer the facility was ­returned to “Australian hands”.

As revealed by The Australian, New York-based Cerberus Capital Management has emerged as a ­serious bidder for the port, which will be forcibly acquired by the government unless Chinese firm Landbridge Group sells it to an ­approved buyer.

Japanese-owned logistics company Toll Group, which manages a Cerberus-owned shipyard in The Philippines, would likely be brought in to operate the port if the US bid was successful.

It’s understood a number of other suitors are also interested in the business, including Australian superannuation funds.

Cerberus, which has $US60bn in assets under management, was until recently run by co-­founder Steve Feinberg, who was appointed in March to be US Deputy ­Defence Secretary.

The Prime Minister, who pledged during the election campaign to return the port to Australian control, was noncommittal when asked if the government would support the US bid.

“We’ve said we want to see it in Australian hands,” Mr Albanese said. “But if there are other proposals, we’ll work those through. But we’ll work those through on a commercial basis.”

Defence Industry Minister Pat Conroy was more insistent that the government was looking for an Australian buyer for the port.

“We’re going through the process now of looking at the options. But our commitment is that at the end of the process, the Port of Darwin will be in Australian hands,” Mr Conroy said.

Cerberus is yet to publicly comment on its bid for the port, but its representatives met last week with Landbridge Group, Northern Territory Treasurer Bill Yan, and Labor’s federal member for Solomon, Luke Gosling.

Landbridge, owned by a Chinese billionaire with close links to the country’s ruling Communist Party, acquired the port’s 99-year lease a decade ago for $506m.

The company says it is not for sale, but informed sources said it would consider offers around $1bn. The figure is equivalent to nearly 30 times the company’s earnings before interest, taxes, and amortisation, which would represent a premium price for the business.

The benchmark price-to-earnings multiple for ASX 200 companies sits just above 18 times, three per cent off its February record.

The Prime Minister announced during the election campaign that Landbridge must either sell the port voluntarily or the asset would be forcibly acquired by the government, gazumping a similar opposition pledge the following day.

It’s not yet clear how the government will proceed with the plan or when it hopes to finalise the process.

The US has had longstanding concerns over the port’s ­Chinese ownership, with former president Barack Obama expressing his displeasure over the sale in 2015.

The facility is close to RAAF Base Darwin and the city’s Robertson Barracks, which are used by more than 2000 US Marine Corps personnel who spend six months of the year in the Top End.

Mr Albanese is facing pressure from Beijing to back down on his pledge, with Chinese ambassador Xiao Qian warning that stripping Landbridge of the asset would be “ethically questionable” given it had ­secured it through an open and transparent bidding process and made significant investments in the facility.

“These ­efforts have brought remarkable improvements to the port,” he said.

James Paterson, who on Wednesday was appointed opposition finance spokesman, said the government needed to act now there was at least one willing buyer for the port. “Labor must ensure the lease is transferred to an Australian-­government approved operator,” the senator said.