The Thessaloniki saga

Sold: the most recent Greek port tender has some unexplained peculiarities. Credit: Maureen Barlin Sold: the most recent Greek port tender has some unexplained peculiarities. Credit: Maureen Barlin

COMMENT: Over 10 years on from the time of the first concession attempt for the northern Greek port of Thessaloniki the port has finally been privatised, but is the result the best one and did the process really live up to European Union standards of transparency or are the Greek politicians (aided by forthcoming bank advisors) incorrigible?

Rumours abound about the process and result.

The first concession attempt for the Port of Thessaloniki – for the container terminal – foundered in 2008 when the Hutchison-led consortium that had been awarded the concession withdrew from the opportunity.

The second concession exercise, required as part of the EU’s bail out conditions, was for the whole port, and in April this year the consortium of private-equity firm Deutsche Invest Equity Partners (not related to Deutsche Bank), Terminal Link and Greece’s Belterra Investments was designated as the winning bidder, offering €231.9m for 67% of the shares. This represented a 70% premium over the shares’ market value as determined by the port’s partial listing on the Greek Stock Exchange.

However, unconfirmed rumours won’t go away that the bidding process was not well conducted or transparent. Bidding took place in two rounds. After Round 1, informed sources state, all bids were leaked immediately. And in Round 2 the winning consortium bid E34 per share which was just high enough to avoid triggering a third round of bidding with DP World who was the second highest bidder with, it is believed, a bid around E30 per share. While this may be co-incidence, it does look suspicious.


There are also two intriguing rumoured connections to the deal. First is Deutsche Invest Equity Partners (DIEP) which is the majority partner in the consortium. DIEP is a small German investment fund and does not appear to have the experience to participate in a bid for a complex and unionised port. Funds from such an entity would normally be expected to cycle out quite quickly – even before the benefits of the required €180m investment kick fully in.

The second is a rumoured connection between the tender and Russia through Ivan Savvides, a Greek-Russian tobacco tycoon and Thessaloniki football club owner, who has held prominent political positions in Russia.

Rumours are circulating that DIEP is actually investing Russian funds, investing alongside Ivan Saviddis. While Port Strategy cannot comment on veracity of such rumours, it is remiss that there has been no public discussion of where the DIEP funds originate from and, therefore, who really bought Thessaloniki Port.

Readers may also ask what CMA CGM’s, through Terminal Link, interest is in this consortium. As the experienced port operator, it would make sense for Terminal Link to desire a controlling stake and here again, the rumour mill has thrown out an answer. Could Terminal Link has benefitted from “sweat-equity” in order to allow DIEP and Saviddis to qualify for bidding? The criteria was that a bidding consortium must have an experienced port operator as equity owner.

The remit of the Hellenic Republic Asset Development Fund, charged with selling the port of Thessaloniki, had one main guiding principle throughout the sale process: to maximise the return from the port’s sale. It had no other criteria as typically would be applied through a Multi-Criteria Analysis style of bid in a developed nation situation. Hindsight may yet prove this to be a very short-sighted process and especially if there proves to be a hidden agenda behind the port of Thessaloniki winning bid.


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