Cyprus Mail
Cyprus

CY wants investors to keep name, base and vital routes

By Stefanos Evripidou

THE government wants any potential strategic investor in Cyprus Airways (CY) to keep the airline’s name, maintain the company base in Cyprus and some air routes considered of key importance to Cypriots, it transpired on Friday.

A ministerial committee convened at the finance ministry to assess investors’ initial expressions of interest in the stock and/or assets of the national carrier.

The meeting was attended by the finance and communications ministers, the accountant-general, the CY chairman and KPMG, the airline’s consultants.

According to public broadcaster CyBC, the committee discussed the criteria that will be employed to decide on a potential strategic investor for the struggling airline.

Apart from the price offered and the ability of the bidder to successfully invest in the airline, it is believed the government will want three other criteria satisfied: the airline should keep its name; its base to remain in Cyprus; and a number of routes considered very important for Cypriots to remain in operation.

The government had invited submissions of non-binding expressions of interest in CY, from which 22 companies expressed an interest on July 23, among them five involved in aviation. The process is a preliminary step towards any eventual binding offer by a bidder. Remaining bidders must file binding proposals by the end of September.

The public broadcaster reported that confidentiality letters will be sent to the 22 interested companies on Monday. Those interested must respond by Wednesday so that the airline’s data could be made available for further examination.

A strategic investor is seen as the only way to keep the airline afloat, which has recorded huge losses in recent years. It is also under scrutiny by the European Commission over a €31.3m capital increase in early 2013 and a €73m rescue package by the state in 2012, to establish whether it violated state aid rules.

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