11 April 16

Dockworkers protest as COSCO buys stake in Piraeus

1Dockworkers at Piraeus Port have walked out and container terminals were shut on April 8 as Greece’s privatisation agency signed an agreement to sell a 67% stake in the port to China COSCO.
Dockworkers went on strike and marched in central Athens to protest against the EUR 368.5m (US$401m) deal sealed by the Hellenic Republic Asset Development Fund (HRADF) which they are afraid will put their jobs at risk.

COSCO was declared as the preferred investor for the stake in Piraeus Port Authority (PPA) in January 2016, following the company’s submission of an improved offer, in a process initially opposed by Greece’s left-wing government but then resumed as part of the country’s EUR 86bn (US$98bn) bailout deal.
The improved offer of €22 (US$24) per share is part of an agreement worth a total of €1.5bn (US$1.6bn).

This includes the implementation by the Chinese state-owned port operator of mandatory investments worth a total of €350bn (US$399bn) over the next ten years and the expected revenues from the Concession Agreement for the HRADF, amounting to €410m (US$447m).
According to the HRADF, the overall agreement also includes the expected dividends and interest receivable by the agency as well as the estimated investments, apart from the mandatory, until the concession expires in 2052.
COSCO will be paying the total amount in two stages. During the first stage, the company will become a 51% shareholder of PPA by making a payment of €280.5m (US$305) to HRADF.

After five years, providing that it fulfils specific conditions set out in the Share Purchase Agreement (SPA), including completing the mandatory investments, the Chinese company will increase its stake to 67% by paying the agency a further €88m (US$96m).
COSCO, which will operate a container terminal as well as a cruise terminal and car facilities, already operates its wholly-owned subsidiary Piraeus Container Terminal (PCT), which is made up of six deepwater berths at Piers 2 and 3 of the port.
The Chinese port operator was the sole bidder since its competitors International Container Terminal Services, Inc. (ICTSI) and APM Terminals (APMT) failed to submit offers by the bidding deadline.

Source: Container Management