COSCO鈥檚 higher bid for Piraeus port accepted by Greek fund
Print Edition
CHINESE COSCO Group’s improved bid for the acquisition of Piraeus port, the largest port in Greece, has been accepted by the Greek privatization fund.
“During today’s session, the Hellenic Republic Asset Development Fund (HRADF)’s board of directors accepted the improved offer made by COSCO Group (Hong Kong) Ltd in the context of the tender for the sale of the 67 percent of Piraeus Port Authority (PPA) shares,” an HRADF statement said.
Under the tender’s conditions as soon as COSCO submits the required complementary documents, it will be designated as “preferred investor.”
The Chinese group submitted on Wednesday an improved binding offer of 22 euros (US$24) per share which amounts to 368.5 million euros for the controlling 67 percent stake in PPA, according to HRADF’s announcement.
The fund’s governing board had opened COSCO’s initial offer on January 12, but requested an improved bid.
The privatization fund took into account the independent experts’ appraisals that HRADF had commissioned, the statement said. Although no numbers were revealed, according to sources close to the fund, the two independent experts suggested the sale for 18.40-21.20 euros per share.
PPA was valued at 337 million euros on Tuesday’s share price at the Athens stock market.
The Chinese company was the sole bidder in the final stretch of the international tender that was launched two years ago, as other candidates shifted their interest in other tenders recently.
Under the current timetable, the concession deal must be approved by PPA’s shareholders in February, then Greece’s Court of Audit and the parliament. The process was expected to be completed by May, said HRADF sources.
COSCO has committed to invest an extra 350 million euros over the next decade in infrastructure works at Piraeus port, according to the statement.
Should the deal be finalized, COSCO will obtain the majority stake of 51 percent in PPA in the first phase for 280.5 million euros, and the rest of the shares in five years for 88 million euros, the statement said.
Greece estimates that the overall benefit of the transaction for the Greek economy until 2052, when the concession agreement expires, will reach 1.5 billion euros, the HRADF said.
Since 2009, COSCO’s subsidiary Piraeus Container Terminal manages Piers II and III at Piraeus under a 35-year concession agreement posting impressive results, while PPA today runs Pier I.
COSCO’s vision to turn Piraeus into a leading international transit hub for products and services from Asia to Europe has already attracted other major multinationals at the port.
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