China’s state owned shipping firm, the China Ocean Shipping Company is investing nearly €1 billion to buy the biggest port in Greece, one of the most crucial parts of the country’s economy.
COSCO, as it is known has bought a 67% stake in the port of Piraeus for €368.5 million, and has also agreed, as part of the deal, to invest €500 million in improving facilities at Piraeus, just outside of Athens. Payments will be split between a 51% stake bought now, and another 16% which will transfer into COSCO’s ownership in five years time.
The deal was signed in a ceremony at the port featuring Greek prime minister Alexis Tsipras and Cosco’s chairman Xu Lirong on Friday afternoon.
In a statement, law firm Paul Hastings, one of the advisors on the deal said: “This marks one of the most high profile Greek privatizations of recent years and successful execution of the deal is a key part of the plan to turn Piraeus into a logistics hub for Chinese exports to Europe.”
The sale of Piraeus to China is part of Greece’s commitment to sell around €5 billion of assets as part of its third bailout deal with its Troika of creditors.
As a maritime nation, Greece’s economy is heavily reliant on shipping, and the industry makes up more than 6% of the country’s GDP. More than 7% of the Greek workforce is employed in shipping.
Piraeus Port’s stock has been getting crushed of late, losing 26% of its value since late 2015, largely in part to the crashing cost of shipping globally. Investors have reacted well today however, and Piraeus’ stock is up 2.6%. Here’s how it looks since December: