Cosco eyes 60% stake in Piraeus Port
January 31, 2013 Category Logistics, Ports & sea transport
Chinese shipping group Cosco is considering investing €1 billion to acquire a 60% stake in Greece’s largest port at Piraeus, which is on the government’s privatizations list. Greek Finance Minister Yannis Stournaras said Cosco had “shown an interest” in expanding its investment in Piraeus, without giving details. Cosco has already made a major investment in Piraeus port, which is 74% state-owned. Cosco spent €4.3 billion on a 35-year management lease for the No 2 and No 3 piers, which it has been operating since June 2010. In 2011, about 1.7 million containers passed through Piraeus, the country’s busiest port and a gateway to Eastern Europe. Cosco also announced investment plans to improve port facilities, build a new pier and almost triple the volume of cargo the port can handle. The company pays €100 million a year to the Greek government to maintain its presence at the port. The Greek port has generated moderate profits for the group compared with its financial losses over the last two years. During the first three quarters of 2012, China Cosco Holdings Co, the group’s Shanghai-listed unit, suffered a loss of CNY6.4 billion, the largest loss among the more than 2,000 listed companies. Two consecutive years of losses will put the company on the special-treatment list of the Shanghai Stock Exchange, which would limit the daily trading movement of its stock to 5%, compared with the standard 10%. Three years of losses could result in it being removed from the exchange. Investment in the port could strengthen Cosco’s market position. “As global trade is increasingly relying on China’s growing imports, it is very important for shipping companies such as Cosco to strengthen their global presence,” said Han Yichao, Analyst with Changjiang Securities Co.
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