HRADF accepts Cosco Group’s offer of € 368.5 million for a 67% stake in the Piraeus Port Authority

Published on 27/01/2016 in Privatisations

HRADF accepts Cosco Group’s offer of € 368.5 million for a 67% stake in the Piraeus Port Authority


 

The Hellenic Republic Asset Development  Fund (HRADF) announced that it has accepted a bid of € 368.5 million for a 67% equity share in the Piraeus Port Authority S.A. (OLP) from Hong-Kong based Cosco Group.

ΗRADF terms the deal as a major milestone in implementing the privatisation commitments of the Greek Government. OLP currently operates Piraeus Port under a concession agreement with the Greek state.

The total value of the agreement amounts to € 1.5 billion and includes:

  • € 368.5 million for a 67% equity share in the Port Authority;
  • mandatory investments of € 350 million within the next 10 years
  • an additional revenue of € 410 million from a Concession Contract

The COSCO concession lasts to 2052. The transaction is structured into two stages:

  1. COSCO will pay € 280.5 million to HRADF in exchange for 51% of OLP shares
  2. Within five years and upon fulfilment of the Shares Purchase Agreement (SPA), including successful completion of required investments, COSCO will pay the remaining € 88 million to HRADF and increase its share of the Port Authority to 67%

The tender dossier will be submitted to the Court of Auditors for pre-contractual examination. The deal involved the following parties on behalf of HRADF:

  • Morgan Stanley and Piraeus Bank as financial advisors
  • Freshfields Bruckhaus Deringer LLP and Alexiou – Kosmopoulos Law Firm as legal advisors
  • Hamburg Port Consulting (HPC) and Marnet as technical consultants

After Alexis Tsipras won the Greek elections of January 2015, the privatisation transaction of the Port and other state assets were put on hold. The procedures were resumed as part of the Third Bailout Agreement of August 2015. Resistance from politicians and labour unions together with bureaucratic delays have hindered accelerated privatisation efforts, which have been a key objective of all bailout packages since 2010.

Overall, ΗRADF expects an income of € 2 - 3 billion from privatisation of Greek state assets in 2016, whereas the target of the Third Bailout foresees an amount of 3.7 billion.

The privatisation of the Greek railway company TRAINOSE S.A. and its maintenance operator ROSCO is the next major concession project. According to a recent ΗRADF announcement, the international tender for the sale of 100% of TRAINOSE shares is going to be relaunched. Binding offers are to be submitted between February 1 and April 26, 2016.

 

Photo (c) World Maritime News