MITSY Mitsui and Company Ltd (PK)

China's shipping and port giant China Cosco Holding Co. is so far the sole bidder for a majority stake in the long-delayed privatization of Greece's main port of Piraeus, two people with direct knowledge of the deal said Wednesday.

Two other shortlisted investors—APM Terminals, owned by Danish shipping conglomerate A.P. Moller-Maersk​ A/S, and Philippines-based port operator International Container Terminal Services Inc.—didn't submit binding bids by Monday's deadline, the people said.

The privatization is expected to generate hundreds of millions of euros for cash-strapped Athens. The Hellenic Republic Asset Development Fund, which handles state asset sales, said it would disclose the bids for the port on Jan. 12. APM Terminals and ICTS declined to comment.

"It will be complicated for offers to be accepted after the deadline, but since the seller has not officially said who put forward binding bids, it's not unprecedented that a late entry comes into the fold," one person said.

Regardless of the number of offers, Cosco is considered the favorite to win the bid as it already operates two container terminals under a 35-year concession it acquired in 2009.

Piraeus, just a few miles south of the Greek capital of Athens, is the de facto home of Greece's giant shipping industry and one of the largest ports in the Mediterranean. As Piraeus is the closest Western port to the Suez Canal, Cosco already is using it as a transshipment hub for Asian exports to Europe coming in on container vessels from China.

"Beyond their existing presence in Piraeus, the Chinese have a long standing relationship with Greece's shipping sector, including multibillion credit lines for Greek owners to build ships in Chinese yards, so I will be surprised if Cosco does not win the bid," said George Xiradakis, an Athens-based marine-business consultant and an adviser of China Development Bank.

Stergios Pitsiorlas, head of the Hellenic Republic Asset Development Fund, told The Wall Street Journal last week that the fund would consider Cosco's existing investment in Piraeus when evaluating the bids. However, he said this didn't mean the deal was sealed.

Greece's leftist government had pushed the privatization back for a year, upsetting potential investors and the country's international creditors. The creditors had made the selling of state assets a condition for a multibillion-euro bailout package to keep Greece from defaulting on its debts. APM Terminals and ICTS declined to comment.

The deal involves bids for a 67.7% stake in Piraeus Port Authority SA. A 51% slice will be transferred to the winning bidder at once and the remaining 16.7% over the next five years as required infrastructure investments at the port take shape.

People with knowledge of the deal said the port sale could yield about €700 million ($76​8.5 million), including the €300 million investment the winner must put into Piraeus over the next five years. Piraeus Port Authority's market capitalization is €357 million.

​Greece's Syriza leftist government, which first won power in January and was re-elected in September, initially opposed privatizations to which the previous conservative administration had agreed. It rolled back all potential deals, and no sale proceeds came in this year​despite an agreement with the country's creditors that €2.8 billion worth of state asset sales would be completed.

For next year, the target is set at €3.5 billion, but Mr. Pitsiorlas said €2.5 billion is more realistic.

​The second-biggest Greek port, in the northern city of Thessaloniki, will be among the first to be privatized next year, according to ​the development fund's schedule. Both APM Terminals and ICTS are in the running, ​ along with Germany's Deutsche Invest Equity Partners GmbH and Japan'​s Mitsui & Co.

Binding bids are expected in April. People familiar with the matter said APM Terminals is the front-runner to win that concession.

Write to Costas Paris at costas.paris@wsj.com

(END) Dow Jones Newswires

December 23, 2015 08:25 ET (13:25 GMT)

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