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Cosco finally gets its hands of port of Pireaus with improved bid

Cosco finally gets its hands of port of Pireaus with improved bid
After waiting two years, Cosco Group (Hong Kong) has got its hands on the port of Piraeus.

A bid of EUR386.5m ($402m), rising to EUR714m including investments pledged, secured Cosco the controlling stake in Piraeus Port Authority (PPA), Greece state privatisation fund (Taiped) confirmed late 20 January.

The bid secures the 67% stake held by the state in the PPA and represents an offer of Euro 22 per share, considerably above the Euro 14 at which the stock has been trading on the Athens Stock Exchange recently and the Euro 16.85 high of the past year.

Taiped said the offer “was a significantly improved binding offer” than the one submitted 12 January within the framework of an international competition. In fact, then Cosco was the only bidder and was given a week to table an improved offer.

Total value of the agreement amounts to EUR1.5bn according to Taiped as it includes the EUR368.5m offer, mandatory investments amounting to EUR350m over the next decade, the expected revenues from the concession agreement for the state of EUR410m plus the expected dividends and interest receivable by Taiped as well as the estimated investments, apart from the mandatory, until the expiration of the concession, in 2052.

Further, 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 is expected to add some 125,000 jobs.

Though the official paperwork remains to be done and protests against the sale continue, Piraeus’ privatisation, the first agreed to by the Alexis Tsipras-led Syriza-Independent Greeks coalition government, opens the way for the development of the combined transport sector in Greece.