China’s Cosco Group will obtain 67 pct of Pireaus Port (OLP) after the company submitted an improved offer of 368.5 million euros (€22/per share) Greece’s privatization fund (HRADF) said in a press release on Wednesday.
The sale, if successfully concluded, will be the second large privatisation for Tsipras’s government since it took power. Athens sealed a 1.2 billion euro leasing deal for 14 regional airports with Germany’s Fraport in December.
Privatisations have been a key element in Greece’s bailouts since 2010 but have reaped only 3.5 billion euros because of political resistance and bureaucratic hurdles.
The leftist government of Alexis Tsipras halted the sale of a majority stake in Piraeus Port and other state assets after winning elections in January last year.
Mandatory investments
The process resumed under the terms of a third international bailout for Greece of up to 86 billion euros ($94 billion) in August.
According to HRADF’s announcement, the agreement also includes mandatory investments from the Chinese group, amounting to €350m over the next decade.
Taking on account the expected revenues from the concession agreement, amounting to €410m, the expected dividends and interest receivable by the HRADF as well as the total estimated investments by the expiration of the concession, in 2052, HRADF BoD puts the total benefit to the state at €1.5bn.
In the first stage of the transaction Cosco will acquire the 51% stake in OLP for the amount of €280.5m, while after a five-year period, should Cosco fulfill certain conditions, including the successful completion of the mandatory investments, it will pay an additional amount of €88m in order to increase its stake at 67%.
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