Once unthinkable move results in terminal stakes being bought by bitter rival Hutchison Whampoa's coffers will receive a $5.5 billion boost when the conglomerate sells part of its prized port assets to an arch-rival for $7.21 billion. Confirming a report in last week's South China Morning Post, the company yesterday said it had reached an agreement to sell a 20 per cent holding in Hongkong International Terminals (HIT) and 10 per cent of Cosco-HIT to Singapore's PSA International. The proceeds would replenish working capital, Hutchison said. Analysts said the sales to state-owned PSA would help Hutchison work out a paper balance for its US$25 billion as yet unproven venture into third generation telecommunications. Canning Fok Kin-ning, Hutchison managing director, said the group was 'happy' to forge a strategic alliance with PSA, one that would result in 'further value creation for all parties'. 'The terms of the transaction are fair and reasonable and are in the interests of the company and its shareholders as a whole,' he said. The transactions will leave Hutchison with a 66.5 per cent stake in HIT and 33.25 per cent of Cosco-HIT on completion of the deal on June 22. HIT and Cosco-HIT operate container terminals at Kwai Chung. Analysts said the sales were a logical move as Hong Kong ports had lost traffic to low cost facilities in Shenzhen in the past five years. A partnership between PSA and Hutchison - the world's two biggest port operators - would have been unthinkable a few years ago. PSA International is Singapore port operator PSA Corp's international investment arm. Meanwhile, Hutchison said it would buy up to US$75 million worth of new shares in H-share candidate China Cosco Holdings, the mainland's biggest container shipping line and terminal operator. China Cosco and Hutchison are shareholders of terminal operator and container lessor Cosco Pacific. Sources said Hutchison was among three main strategic investors, including Temasek and Henderson Land Development chairman Lee Shau-kee, who have committed to US$400 million in shares, or up to 24 per cent of China Cosco's total offer. The listing, which aims to raise up to US$1.64 billion, is due next month.