China Ocean Shipping Group Co (Cosco), the parent of shipping and ports giant China Cosco Holding, has emerged as an early favourite in an auction to buy a majority stake in the operator of Greece's main port of Piraeus, according to people familiar with the matter.
Greece named six bidders last month who are in the running to buy its 67 percent stake in the Piraeus Port Authority, which runs Athens's main port and is listed on the Athens stock exchange, reported The Wall Street Journal.
The company's current market capitalisation is about US$640 million. Other large bidders include APM Terminals, owned by Danish shipping company A P Moeller Maersk; Ports America Group Holdings, the biggest US port operator; and Philippines-based port operator International Container Terminal Services Inc (ICTSI).
Cosco subsidiary Cosco Pacific already operates the container terminal at Piraeus after signing a long-term lease in 2009. Under Cosco management, the terminal has more than doubled its handling capacity since 2011.
In considering the competing bids, the Greek government "wants to further develop the relationship" with Cosco, according to a person familiar with the matter.
"The Greeks want Piraeus to become a gateway for Chinese trade in Europe, and Cosco is the preferred partner," said another person familiar with the matter.
Representatives for Cosco didn't respond to requests for comment.
Apart from its container terminal, Piraeus is one of Europe's busiest tourist ports, handling about 20 million cruise-ship and ferry passengers a year. Cosco is currently spending about US$300 million over the next six years to boost the port's cargo-handling capacity, with a target of raising that by two-thirds to an annual 6.2 million containers.
Cosco has made the port its central container terminal for southern Europe, and moves Asian-built products from companies such as Hewlett-Packard and Chinese technology giants Huawei Technologies and ZTE Corp to Central and Eastern Europe through Piraeus. Samsung Electronics, based in South Korea, is in talks with Cosco to make the port a main distribution point in southern Europe.
In 2012, Piraeus ranked fourth in terms of handling capacity in the Mediterranean, behind Spain's Valencia and Algeciras ports, and Turkey's Ambarli.
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