Greece’s state privatisation agency Hellenic Republic Asset Development Fund (HRADF) has announced that it decided to declare COSCO as the preferred investor for a 67% stake in in Piraeus Port Authority (PPA) following the company’s submission of an improved offer of EUR 368.5m (US$401m).
The improved offer of €22 (US$24) per share is part of a €1.5bn (US$1.6bn) agreement, which includes the implementation of mandatory investments worth a total of €350bn over the next decade and the expected revenues from the Concession Agreement for the HRADF which amount to €410m (US$447m).
As HRADF reported, the overall agreement also takes into account the expected dividends and interest receivable by the agency as well as the estimated investments, apart from the mandatory, until the concession expires in 2052.
The total amount will be paid by COSCO in two stages, the first of which involves becoming a 51% shareholder of PPA by making a payment of €280.5m (US$305) to HRADF.
After five years, if COSCO fulfils certain conditions set out in the Share Purchase Agreement (SPA), among which the completion of the mandatory investments, the Chinese company will increase its stake to 67% by paying the agency an additional €88m (US$96m).
COSCO will operate a container terminal, which handled 600,000 teu in 2014, as well as a cruise terminal and car terminals.
The Chinese state-owned port operator was the sole bidder as its competitors APM Terminals (APMT) and International Container Terminal Services, Inc. (ICTSI) did not submit offers by the bidding deadline.
COSCO already operates six deepwater berths at Piers 2 and 3 of the port, which make up its wholly-owned subsidiary Piraeus Container Terminal (PCT).
It is believed that APMT and other major terminals operators could still be interested in a potential bidding process for Thessaloniki Port, but there is significant local angst against the privatisation which could slow down any bidding process.