Greece Asks COSCO to Improve Bid for Piraeus Port

By Angeliki Koutantou

ATHENS, Jan 18 (Reuters) – Greece will evaluate on Wednesday an improved bid that China’s Cosco is due to submit for a majority stake in Piraeus Port, a senior official at the privatisation agency (HRADF) said on Monday.

Cosco was the sole bidder for a 67 percent stake Piraeus Port Authority (OLP), the manager of the country’s biggest port which is a gateway to Asia, eastern Europe and north Africa. The agency has asked Cosco to improve its offer.

“HRADF’s board is scheduled to convene Wednesday evening to assess an improved offer that Cosco will have submitted by then,” the official told Reuters on condition of anonymity.

The official said if Cosco’s bid was not satisfactory the agency could ask the company to improve it further. The agency has the right to cancel the tender if it deems the offer is not satisfactory, under its competition rules.

“Negotiations with Cosco will continue until the last minute so that we achieve the best possible price,” the official said.

Piraeus Port is valued at $367 million based on Monday’s share price. A source close to the process said that Cosco has offered about $300 million for Piraeus Port, a premium of about 22 percent, according to Reuters calculations. The company has until 1500 GMT on Wednesday to improve its bid.

The leftist government of Alexis Tsipras halted the sale of the port and other state assets after winning elections in January last year but resumed the process under a third bailout of up to 86 billion euros ($94 billion) agreed in August.

WORKERS AGAINST

Piraeus Port workers are against the sale because they fear it will lead to job cuts, while Greece’s Shipping Minister Thodoris Dritsas has said having a sole bidder was not the best outcome one should expect.

OLP operates Piraeus Port under a concession agreement with the Greek state. The company’s board decided last week by a majority to renegotiate the concession agreement, upon which Cosco based its offer.

The decision is not expected to affect the sale, which needs to be approved by OLP’s shareholders, but is undermining the government’s attempt to achieve the highest price possible for the port, the official said.

Denmark’s container terminal operator APM Terminals and Philippines-based International Container Terminal Services were also interested in the port but did not submit a bid.

Privatisations have a been a key part of Greek bailouts since 2010 but have not produced much money so far due to resistance from politicians and unions and bureaucratic delays.

The privatisation agency is expecting to raise two to three billion euros from state assets this year. That would be nearly double the figure projected in the 2016 budget but less than the 3.7 billion euro target set in the latest bailout.

Greece has also pushed a Jan. 15 deadline back by a few weeks for the submission of binding bids for the railway company (TRAINOSE) and its maintenance operator (ROSCO), due to technicalities, the official said.

Russian Railways (RZD) and its Greek partner GEK-Terna Holdings, France’s SNCF Participations and Romania’s S.C. Grup Feroviar Roman were shortlisted for TRAINOSE in 2013.

An official close to the sale said RZD was still interested in TRAINOSE but the other two were less likely to bid. ($1 = 0.9182 euros) (Editing by David Clarke and David Evans)

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