Greece has been forced to sell its most important port to China

Piraeus port
Piraeus, Greece’s most important and biggest port. Mike Bird, Business Insider

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:

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