The Hellenic Republic Asset Development Fund (HRADF), Greece’s privatisations agency,
completed on Wednesday (Oct. 6) the transfer through Athens Stock Exchange of the 16% stake of PPA S.A. (Piraeus Port Authority) to Chinese port operator COSCO SHIPPING (Hong Kong) Co., Limited.
The transaction followed the amendment of the Concession Agreement between the Greek State with PPA S.A. and its ratification by the Greek Parliament. Respectively, HRADF and COSCO SHIPPING (Hong Kong) Co., Limited signed the amended Share Purchase Agreement (SPA) and the Shareholders Agreement (SHA).
Under a 2016 Greek privatisation deal, COSCO Shipping bought a 51% stake in in the Athens Stock Exchange listed Piraeus Port Authority (PPA) for 280 million euros ($328 million). It then committed to mandatory investments worth about 294 million euros over five years to purchase an additional 16% stake for 88 million euros.
Cosco was due to fulfill this key condition by August, but it ran out of time, blaming delays beyond its control, and had been in talks with the government to resolve the issue. On Sept.22, Cosco and Greece agreed to amend their 2016 agreement, which they said would “settle effectively” all issues which arose during the implementation of the mandatory investments and on Sept. 30, the Greek parliament approved the amended agreement, allowing Cosco to raise its stake in Greece’s biggest port of Piraeus.
COSCO SHIPPING (Hong Kong) Co., Limited paid the HRADF the price of 88 million euros for 16% of the shares, for which HRADF collected plus additional 11.87 million euros in accrued interest, as well as a letter of guarantee of 29 million euros.
The port of Piraeus, a historic port with a 2,500-year old history, is located at the crossroads of Europe, Asia and Africa. It is the largest port in Greece, spanning a coastline length of more than 24 kilometres and spreading over a total area of more than five million square meters.
Today, with a total of 17.6 million passengers it is the leading port in Europe in terms of passenger traffic, the largest container terminal in Mediterranean Sea and one of the top-5 in Europe and one of the largest car-terminals in Eastern Mediterranean Sea. COSCO took over its container operations in 2009 and upgraded its infrastructure.
PPA S.A. is an Athens Stock Exchange listed company since 2003. It is also included in the FTSE/ Athens Large Cap, where participate the biggest in terms of capitalization companies in Athens Exchange. PPA’s Impact on the Greek Economy is estimated to be 0.68% of the National GDP.
The year before Covid-19 struck, 2019 was a year of growth for PPA S.A. The company achieved a turnover of €149.2 million compared to €132.9 million in year 2018, recording a 12.3% increase and a similar increase in profitability. Container handling throughout the port reached 5.65 million TEUs, up by 15%, ranking Piraeus first in the Mediterranean and fourth in Europe. Ferry passengers travelling through the port exceeded 16.5 million, while cruise passengers numbered 1.1 million.
The latest deal solidifies China’s influence on the lucrative trans-Mediterranean maritime artery.