Cyprus Mail
Business Cyprus

Cobalt seeks time to find new investor (Updated)

Christos Theodorides

By Evie Andreou

Cyprus-based Cobalt Air will propose to the licensing authority to issue a temporary suspension of its licence to give it some to seek a new investor, director of the board Grigoris Diakos said on Thursday.

The company announced on Wednesday night it had cancelled all flights from that point onward due to the indefinite suspension of its operations after failing to secure more funding by its investors Chinese Avic Joy Air.

A very emotional Diakos told Radio Proto on Thursday morning that the Chinese company, for its own reasons, had decided it could no longer continue funding Cobalt.

“The last few weeks an effort was underway to find a new investor, but because our own priority was safety and to be fully in line with the law, after yesterday, which we had said it would be the last day to reach to the decision, we informed the competent government services […] and we took a decision that was very painful to all,” Diakos said.

He added that the company has been in contact with the government since the beginning of the week concerning its problems.

Diakos said that they would propose to the licensing authority a temporary suspension of its licence to “give us some time to seek another investor.”

During statements to the press at the air carrier’s offices in Larnaca later in the day, Diakos said that the future of the company would depend on the decision of the licensing authority.

“If all the licences we have are cancelled then no new investor will show any interest,” he said.

He added that there has been some interest by investors, but that the tight timeframe they had to decide made things difficult.

If the company could buy some time, he said, they would be able to “give to some, serious investors enough time to assess the financial data and prospects and to decide whether they would like to invest.”

In the event a new investor is found, the company would need to prove to the airline licensing authority that it has the necessary funds for its operation. “It is a matter of the authority how long it would take to give us the green light to resume operations.”

The state will be covering the cost of repatriation of passengers who were left stranded. Those passengers will have to return home by October 24.

Concerning arrangements for passengers scheduled to travel after that date, Diakos said that the Bank of Cyprus had already issued announcements on how its customers who have booked tickets with its cards could claim their money back. He said that the same is applicable with passengers who have booked tickets with cards issued by other banks.

On claims there had been accusations of mismanagement of funds, Diakos said Cobalt is a private company and that no tax-payer money was used for its creation.

“It was a private initiative. We tried to offer a Cyprus-based air carrier so that there was no dependence on foreign interests,” he said.

Diakos said that the company had succeeded to secure all certificates an air carrier is required to obtain within two years, when it takes other companies six to seven years to achieve that, and that it had also won two awards.

The company, he said, had informed its staff that there were problems it was trying to resolve.

The final announcement on Wednesday had to be made after the last flight for the day had landed to avoid any problems, according to advice by company experts, he said.

Fighting tears when talking about the airline’s approximate 280 employees Diakos made a short pause to compose himself. “We feel great responsibility toward our staff, they are enviable people who had experienced the same with (now defunct state-owned) Cyprus Airways,” he said.

He added that the company fully respects its staff.

The air carrier hired a large number of former staff of Cyprus Airways, which was grounded in 2015 after the European Commission ruled that a state aid package was in violation of competition regulations. The company was ordered to return €65 million, which triggered its shutdown.

 

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