Cosco Group (Hong Kong) Ltd bid 386.5 million euros, reaching up to 714 million including investments pledged, for the controlling stake in Piraeus Port Authority (OLP), and the state privatization fund (TAIPED) awarded it the status of preferred bidder late on Wednesday.
The fund’s board puts the total benefit to the state at 1.5 billion euros. Studies by the Foundation for Economic and Industrial Research (IOBE), National Bank and international firms show that increases in container handling rates and the general development of the port of Piraeus as provided for by the Cosco plan is expected to fetch additional long-term revenues of 5.1 billion euros per year to the Greek economy and add some 125,000 jobs.
OLP’s privatization, the first agreed to by the SYRIZA-Independent Greeks government, opens the way for the development of the combined transport sector in Greece. This will be complemented by the concession of the Thriasio Freight Center in western Attica over the next few months, the privatization of Thessaloniki port later this year and the planned upgrade of railway infrastructure and services via privatizations.
The new Cosco offer submitted on Wednesday afternoon amounted to 22 euros per share for a total of 368.5 million euros for the 67 percent stake in OLP, plus another 350 million euros in planned investments. The share offer therefore values OLP at 550 million euros, against a stock value of just 323.75 million euros (12.95 euros per share) at Wednesday’s bourse closing. This means that the Chinese group has offered Greece a significant premium of 69.68 percent on the company’s stock price.
Cosco has also committed itself to investing 296 million euros in the next five years and another 50 million in the following three years. This investment mainly concerns ship repair activity, cruise shipping, the restoration and expansion of the port’s Terminal I, the maintenance and upgrade of the passenger terminal docks, and the car terminal.
The concession contract must now be approved at the OLP general meeting next month, before being put to Parliament for ratification, a process whose completion will take at least three months.