Greece Discloses Expected Proceeds From Planned Piraeus Sale

Greece has told creditors it expects to raise at least EUR500 million ($545 million) from the privatization of the Piraeus port, according to Greek officials.

The privatization plan has been controversial, and politicians in Greece’s new leftist-led government have publicly expressed conflicting signals about whether it would go ahead, spooking creditors. Privately, however, senior Greek officials have said it would proceed.

The decision to disclose to creditors the expected proceeds from the planned sale is the latest and clearest sign yet that the government in Athens plans to go ahead.

Greek officials also told creditors they will seek to privatize operating concessions at 14 regional airports, these officials said.

Greece’s previous government has been seeking to sell a 67.7% stake in the Piraeus Port Authority. It would be one of Greece’s biggest divestments, part of an ambitious privatization plan agreed to by the previous government and creditors. Creditors have repeatedly told Athens that the sale of state assets is a must in any new financing deal.

The port, just a few miles south of the Greek capital of Athens, is the de facto home of Greece’s giant shipping industry and is one of the largest ports in the Mediterranean.

The government expects a minimum EUR500 million from the sale, as well as further investments in ship-repair facilities, rail links, and cruise and ferry docks that could create thousands of jobs, the Greek officials said.

The shortlist of buyers for the stake includes China’s shipping and ports giant China Cosco Holding Co., APM Terminals, owned by Danish shipping major A.P. Møller-Mærsk A/S, Ports America Inc., the biggest U.S. port operator, and Philippines-based port operator International Container Terminal Services Inc.

People with knowledge of the situation have said Cosco is the frontrunner given that it already controls two container terminals in Piraeus. The Greek government also believes that China is among only a handful of countries willing to take the risk and invest in the volatile country, these people said.

Greece’s new leftist, Syriza-led coalition government is scrambling to reach a financing deal with international creditors. Since being voted into power in February, the new government has threatened to roll back many of the austerity measures and reforms–such as privatizations–that the country undertook over the past five years to secure billions of euros in aid.

Athens and its creditors–including the European Union, the European Central Bank and the International Monetary Fund–are holding talks in Brussels over the weekend over proposed Greek reforms that will yield more than around EUR3 billion this year, in an attempt to win Athens a new financing package.

On Monday, the talks will be elevated to a more senior level. If there is an agreement, eurozone finance ministers will then meet to decide on whether or not to release a new finance package for Greece.

Dow Jones Newswires

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