Tuesday, January 2, 2018

National Debt Sees Container Shipping Line Acquire Share in Port

Second Major Sale by Liquidation Agency
Shipping News Feature

GREECE – French container shipping line CMA CGM now has a stake in the Port of Thessaloniki following a successful bid by the German led consortium bid to acquire the 67% stake in the facility owned by the Greek liquidation agency, the Hellenic Republic Asset Development Fund (HRADF). Bidding in April came from DP World and International Container Terminal Services Inc. (ICTSI), as well as the eventual winners, a cooperation between Deutsche Invest Equity Partners, Belterra Investments and CMA CGM's ports division, Terminal Link.

Those offers were refused but increased bids saw the consortium, now called South Europe Gateway Thessaloniki (SEGT), come out on top, costing the partners €232 million with a further €180 million in future investment to upgrade infrastructure by 2025. The overall cost of the deal is calculated to be around €1.08 billion after further investments and dividend payments of €170 million are taken into account in a concession agreement which stretches until 2051.

Thessaloniki is a strategic port situated on the inner part of the Bay of Thermaicos, on the northern section of the Eastern Mediterranean Sea, to the west of the centre of the city of Thessaloniki. It occupies a total space of 1.5 million square meters with installations including 6 piers on a 6200 metre-long quay and a depth of 12 metres, with storage areas spreading over 600,000 square meters, servicing all types of cargo as well as passenger traffic. The port also has installations suitable for liquid fuel storage and it is located in proximity to the international, natural-gas pipeline.

Thessaloniki is one of the five Greek ports, which belongs to the Core Network of Trans-European Transport Networks and all the port quays have double/triple rail-lines and are linked to the national and international railroad network. Geographically the port serves Eastern and pan European TEN-T networks covering both the Black Sea and Balkans. The Executive Chairman of HRADF, Mr Aris Xenofos, commented:

“The exploitation of the Thessaloniki port along with the positive impact the successful conclusion of the exploitation agreement of Piraeus Port already has, form an axis of growth and development that crosses vertically our country, further enhancing the role of Greece as the European gateway to international companies for trade and cruise "”.

The deal comes about a year after COSCO purchased a similar concession to control the Port of Piraeus as HRADF continues the process of selling interests in the country’s infrastructure to the highest bidders to comply with the European Union bail out agreement of 2015 which saw the EU underwrite Greek debts, the International Monetary Fund, the European Central Bank and the European Commission are believed to have together stumped up over €240 billion to ensure the country didn’t suffer complete economic collapse, and this is payback time, at least in part.

More but smaller port sales will surely follow, HRADF has around ten more maritime facilities on its books and, despite much opposition from union groups, the left wing government of Prime Minister Alexis Tsipras is committed to paying back €53.5 billion to the Eurozone ‘Rescue Fund’ by July 2018.