Only a fraction of the €118m raised from the sale of Cyta Hellas to Vodafone will end up in the coffers of the parent company, the state-run telecoms corporation said on Monday.
Speaking in parliament, Cyta chairwoman Rena Rouvitha said that of the €118m, €18.5m would go toward paying off current outstanding liabilities of the Greece-based subsidiary to third parties.
Of the remaining €100m going on Cyta’s books, €57.5m will be used to immediately recoup the loans (subsidies) made to Cyta Hellas by the parent company over the years.
The House finance committee heard that Cyta’s budget for 2018 stood at €393m.
Lawmakers posed a series of questions to Cyta officials and are awaiting the responses before approving the organisation’s budget for 2018.
Among other issues, MPs sought further details on the deal to sell Cyta’s subsidiary to Vodafone.
They also requested information about Cyta’s older agreement with LTV, and also quizzed Cyta as to why it has retained the same law firm as its legal advisor since 1965.
MPs additionally wanted to know about the state of the organisation’s provident fund.
Rouvitha said that in 2017 Cyta posted a €22.3m accounting profit from the sale of its prior investment in the Nicosia City Mall.
The state telecoms corp had invested some €30m from its provident into the project, but in late 2017 Cyta sold its stake in the planned mall to Bank of Cyprus.
This transaction generated a net positive for Cyta, Rouvitha said.
The earnings would help towards plugging the deficit in the provident fund.
Grilled by MPs, Rouvitha said Cyta had sustained a 5.5 per cent reduction in revenues from telecoms services.
The company is seeking to boost revenues from alternative sources, she added.
Disy MP Onoufrios Koullas said Cyta’s revenues in 2018 are projected to decline by €20m – which raised questions over the company’s viability.
Akel deputy Stefanos Stefanou stressed that Cyta must remain a public utility.
From 2002 to 2015, the company’s dividend payouts to the state amounted to €750m, he added.