Cyprus Mail
Cyprus

Nine non-binding bids for CY

RYANAIR, Europe’s largest budget airline, and Greece’s Aegean were among nine companies that submitted non-binding proposals for the acquisition of Cyprus Airways (CY), Transport Minister Marios Demetriades has said.

Demetriades told Reuters “more than half” of the 15 parties that earlier made an initial expression of interest and signed a non-disclosure agreement had submitted non-binding business proposals by the time the deadline expired on Wednesday evening.

“I would say the response is encouraging, but we have to assess the non-binding proposals to see what they contain,” he said.

According to Cyprus News Agency, along with Ryanair and Aegean, Israel’s Arkia Airlines is one of the nine companies that filed non-binding proposals before the deadline.

The state, which owns more than 90 percent of CY, invited companies to submit expressions of interest in July. The loss-making airline has struggled to survive against cheaper competitors for years despite several attempts at a turnaround.

About a third of the parties that submitted non-binding business proposals were airlines, Demetriades said.

A government-appointed commission will now assess the proposals and decide “within the next few days” which parties would be short-listed and invited to submit binding offers, he said yesterday.

The goal is to have a strong, local airline, which will serve the country`s passengers and employ as much personnel as possible, Demetriades added.

Responding to criticism of “selling out” the national airline, the minister said without a strategic investor, the company would be forced to shut down in the medium-term.
Attracting foreign investors should be a main objective, he said, noting that the interest shown by foreign companies was a sign that confidence was returning in the country`s economy.

Cyprus Airways has recently resorted to selling assets to stay afloat, including its slots at London’s Heathrow airport.

It is also under scrutiny by the European Commission, which is investigating the terms of a €73 million rescue package in 2012 and a €31.3 million capital increase in early 2013 to establish whether they violated state aid rules.

The EU rules permit a government to provide rescue and restructuring aid to a company in difficulty once over a period of 10 years. Cyprus Airways previously received government aid in 2007.

 


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