Greece will proceed with the sale of stakes in strategic assets such as the port of Piraeus and 14 regional airports this year, according to Greek officials with direct knowledge of the matter.

The Hellenic Republic Asset Development Fund, which sells real estate, infrastructure and other government holdings, will send on Wednesday a revised tender offer to investors, including China Cosco Holding Co, to solicit bids for a stake in the Piraeus Port Authority SA, according to the people who asked not to be identified because the information isn’t public.

The fund is satisfied with an offer of 1.2 billion euros ($1.4 billion) for the lease of 14 regional airports in Greece from Germany’s Fraport AG, and expects to conclude the sale within a month, the people said.

The decision to sell the stakes suggests that left-wing Syriza government is abandoning an earlier pledge to its electorate to block such privatizations amid efforts to secure further funding from international creditors as part of a 240 billion euro bailout.

Greece, racing against time to prevent a cash crunch in early May, is intensifying talks with its euro-area partners to find a consensus on reforms and secure further aid.

In February, Economy Minister George Stathakis vowed to scrap the sale of the port, even after five groups, including Cosco, Ports America Groups Holding and Utilco Emerging Markets Ltd, expressed interest to buy a controlling stake the company in June.

Stathakis also said that the terms for the lease of the Greek airports would have to be drastically revised, adding that if the 14 airports were to be awarded to one company, there was “no way it will get through the Greek parliament.”

Tender Revisions

The fund is now targeting a limited revision of the airport deal that will allow the state and local municipalities to retain a small stake in the consortium and some participation in the management of the airports.

Under the new terms of the port tender, investors will be invited to purchase a 51 percent stake in the manager of Greece’s largest port, instead of a 67 percent stake previously offered, and won’t be offered the management of services for ferries, which was part of the original tender submitted to investors last year, the people said. They expect to close the sale before the end of the year, they added.

The government is also aiming to sell a 49 percent stake in Desfa to Socar, the State Oil Co of the Azerbaijan Republic, instead of the 66 percent originally planned, the people said. They had originally received an offer to buy 100 percent of the company from Socar but the deal was postponed in April following a probe by the European Commission.

Greece is now considering how to proceed with future privatization deals, including selling minority and majority stakes in assets instead of selling them outright, the people said.

[Bloomberg]