A consortium of German private equity firm Deutsche Invest Equity Partners, Ivan Savvidis-controlled Belterra Investments and CMA CGM’s Terminal Link will acquire a 67% stake in the port of Thessaloniki for an initial EUR231.9m ($252m), with the concession running until 2051.
Greece’s privatisation agency Taiped said the state would rake in as much as EUE1.1bn ($1.195bn) from the deal, including the initial investments, over a seven year period and EUR170m in expected revenues from the concession agreement.
The port authority is listed on the Athens Stock Exchange and has a market capitalisation of EUR204m so the winning bid is a considerable premium and was higher than analysts anticipated.
Greece will retain a 7.22% stake in the port after the acquisition, and dividend payments for the state’s remaining share as well as additional investments until the lease expires in 34 years will bring in over EUR500m.
Taiped said the group’s offer bettered that of International Container Terminal Services Inc and DP World subsidiary P&O. All three group’s submitted improved offers April 21 after Taiped had deemed their initial proposals unsealed earlier in the month, to be below the acceptable minimum.
The agreement, which edges close to completion two years after the privatisation process was first launched, is now subject to regulatory approval by a Greek court of auditors and other relevant authorities.
Thessaloniki, is Greece’s second largest port, handled 344,277 teu in 2016 and is seen as a trade gateway to eastern Europe. The port saw 32 days of strike from May to June 2016, associated with the privatisation process. The winning consortium will need to invest EUR180m to upgrade the port in the next seven years and raise throughput to 550,000 teu as CMA CGM is set to use the port as a hub.
Morgan Stanley and Piraeus Bank acted as financial advisors with Freshfields Bruckhaus Derringer and Alexiou-Kosmopoulos Law Firm as legal advisors during the privatisation process.
The consortium adds to the list of major foreign investors in Greece’s maritime assets after Cosco Shipping acquired a 51% majority stake in the country’s largest port, the port of Piraeus, last year. The sale is a key part of the country’s international bailout signed in 2015 and comes less than a year after China’s Cosco Shipping bought a 51% stake in Piraeus port, Greece’s biggest, for EUR280.5m, with another 16% to be acquired over seven years.
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