Greece Okay's China's Cosco Improved Bid

Maritime Activity Reports, Inc.

January 22, 2016

Image: Piraeus Port Authority

Image: Piraeus Port Authority

 The state privatization fund Hellenic Republic Asset Development Fund (HRADF) of Greece has accepted a “significantly improved” offer from China’s Cosco Group for the state’s majority stake in the Piraeus Port Authority (OLP).

“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.
The Chinese group submitted on Wednesday an improved binding offer of 22 euros (US$24) per share which amounts to 368.5 million euros  (US$401m) for the controlling 67 percent stake in PPA, according to HRADF’s announcement.
Cosco is now offering 22 euros per share, HRADF said, which translates into a premium of 69.8 percent based on Wednesday’s closing price of 12.95 euros a share, according to Reuters calculations.
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).
Besides acquiring 67 percent of Piraeus Port,  the country’s largest port,  Cosco has also committed to investing 350 million euros in the next five years.  
“A major development and a very important milestone of the privatization program, in line with the commitments of the Greek Republic has been achieved successfully,” a statement from the Hellenic Republic Asset Development Fund said.
COSCO will operate a container terminal, which handled 600,000 teu in 2014, as well as a cruise terminal and car terminals.
The acquisition is expected to be agreed by OLP's shareholders next month before seeking approval from Greece's Court of Audit and parliament. The deal will be fully rubber stamped by May, Xinhua News Agency reports.
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.
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