Port of Thessaloniki: A gateway and transport hub for the country, for the Balkans and the wider SE European region
Business File, June-July-August 2017, No. 111
The port of Thessaloniki is already added to the list of major foreign investors in Greece’s maritime assets. e new list of port privatisations includes, among others, the ports of Alexandroupolis (gas hub), Kavala, Elefsina, Iraklion.
The world’s third largest container shipping company has become an owner of the concession to run the port of Thessaloniki until 2051, a deal the privatisation agency TAIPED says will see the state rake in $1.195 billion.
France’s Terminal Link, owned by the CMA CGM group, operator of a fleet of 428 ships with capacity of 1,556,000teu on 170 shipping routes, has linked up with German private equity rm Deutsche Invest Equity Partners and the Ivan Savvidis-controlled Belterra Investments to acquire a 67% stake in the port of Thessaloniki for an initial 231.9 million euros ($252m).
Greece’s privatisation agency TAIPED said the state will rake in as much as 1.1 billion euros ($1.195bn) from the deal, including the initial investments, over a seven year period and 170 million euros in expected revenues from the con- cession agreement. CMA CGM holds a 33% stake in the winning consortium, with Deutsche holding 47% and Bel- terra 20%.
The Thessaloniki Port Authority (OLTh), which manages Greece’s second largest port, is listed on the Athens Stock Exchange and has a market capitalisation of 204 million euros, so the winning bid is a considerable premium and was higher than analysts anticipated. The Greek state will retain a 7.22% stake in the port, and dividend payments as well as additional investments until the lease expires in 34 years will bring in over 500 million euros.
TAIPED said the group’s o er bettered those of International Container Terminal Services Inc of the Philippines and Dubai’s DP World subsidiary P&O. All three groups submitted improved offers, after TAIPED had deemed their initial proposals to be below the accept- able minimum. The agreement, two years after the privatisation process was launched, is now subject to regulatory approval by a Greek court of auditors and other relevant authorities.
The winners have pledged to trans- form the northern Greece facility into a gateway and transport hub for the country, for the Balkans and the wider SE European region.
The Consortium will invest 180 million euros
Thessaloniki handled 344,277teu in 2016 and the consortium will need to invest 180 million euros to upgrade the port in the next seven years and raise throughput to 550,000teu with CMA CGM set to use the port as a hub.
The consortium adds to the list of major foreign investors in Greece’s maritime assets after China’s COSCO Ship- ping acquired a 51% majority stake in the country’s largest port, Piraeus, last year for 280.5 million euros, with an- other 16% to be acquired over seven years.
The price paid for Thessaloniki, combined with the increased competition among multinational candidates in TAIPED’s tender and the Chinese in- vestment in Piraeus, serves to con rm views the Greek port industry harbours considerable growth prospects.
Port privatisation is a key part of the country’s international bailout signed in 2015. However, TAIPED will retain control of 10 regional ports of international interest, with the aim of their privatisation or other forms of utilisation, according to the draft update of the bailout agreement Athens reached, on May 2, with creditors, despite strong resistance expressed by SYRIZA government ministers and deputies.
The draft agreement has set the approval of TAIPED’s plans for their utilisation as a milestone the country must fulfill. TAIPED’s asset development plan (ADP) formed earlier this year with the consent of the creditors provides for the calling of a tender for the con- cession of the port of Alexandroupolis, which is shaping-up to become a North Aegean gas hub. This process will start with the hiring of consultants, before an international invitation for expressions of interest.
The Greek state will retain a 7.22% stake in the port of Thessaloniki, and dividend payments as well as additional investments until the lease expires in 34 years will bring in over 500 million euros
Other ports in question are Corfu, Elefsina, Igoumenitsa, Iraklion, Kavala, Lavrion, Patras, Ra na and Volos. The shares of their port authorities were transferred to TAIPED in 2012. Pro ts of those ports rose 40% in 2014 (y-o-y) and another 20% in 2015, earning the state a dividend of 5 million euros.