Cosco Group Set to Acquire 67% of Piraeus Port
China’s Cosco Group will acquire 67 percent of Piraeus Port Authority (OLP), Greece’s largest port, after the company submitted an improved offer of 368.5 million euros, the Greek privatization fund TAIPED announced on Wednesday.
According to TAIPED, once Cosco submits the required documents it will be designated as “preferred investor”.
Cosco was the only bidder in the final stage of the tender last week, initially launched in 2014. TAIPED’s governing board had opened COSCO’s initial bid on January 12 and requested an improved offer.
“Cosco Group (Hong Kong) Limited tabled today an improved binding offer for the acquisition of 67 percent stake of PPA S.A. shares, offering a price of 22 euros per share, ie 368,5 million euros”, TAIPED said in Wednesday’s announcement.
The tender agreement must be approved by PPA’s shareholders next month, then Greece’s Court of Audit and finally the Greek parliament.
Once the deal is finalized, the first stage of the transaction sees Cosco obtaining the majority stake of 51 percent of the PPA for 280.5 million euros.
After a period of five years, should Cosco fulfill certain conditions, which include the successful completion of mandatory investments, the Chinese company will increase its PPA stake from 51 percent to 67 percent (second stage) for an additional amount of 88 million euros.
According to TAIPED, the total value of the agreement is expected to amount to 1.5 billion euros by 2052 when the concession agreement expires.
The total amount includes among others Cosco’s improved offer of 368.5 million euros, mandatory investments of 350 million euros over the next decade and expected revenues from the agreement for the Greek state, amounting to 410 million euros.
The listed Chinese shipping giant has managed the port’s two central container terminals since 2008, when it inked a 35-year deal with the Greek government. The port has since seen an eightfold increase in commercial traffic with companies like ZTE and Hewlett-Packard using the cargo terminals as logistics hubs for their merchandise.