CAIR “close” to find­ing in­vestors, Stansted from Septem­ber

Financial Mirror (Cyprus) - - FRONT PAGE -

Trou­bled na­tional car­rier Cyprus Air­ways is very close to fi­nal­is­ing the frame­work that would al­low for­eign in­vestors to take a strate­gic stake in the loss-mak­ing air­line, while the Euro­pean Com­mis­sion pon­ders a res­cue plan worth EUR 103 mln.

The air­line re­cently con­cluded a co­op­er­a­tion agree­ment with Qatar Air­ways, but this has not pro­ceeded to in­clude an al­liance or out­right takeover, while press re­ports also sug­gested that Abu Dhabi’s Eti­had may be in­ter­ested, but the Gulf car­rier al­ready struck a deal with Al­i­talia last week.

The com­pany’s chair­man Tony An­to­niou, him­self in the lime­light over al­leged mis­use of the cash-strapped air­line’s funds, told the state-con­trolled Cyprus News Agency that “there is spe­cific in­ter­est from po­ten­tial in­vestors that have signed con­fi­den­tial­ity con­tracts with the com­pany.”

“Any in­ter­est is be­ing han­dled by the joint com­mit­tee of the Min­is­ter of Fi­nance, the Min­is­ter of En­ergy, the Ac­coun­tant Gen­eral and the chair­man of the board,” An­to­niou was quoted as say­ing.

The Euro­pean Com­mis­sion has ini­ti­ated an in-depth in­ves­ti­ga­tion to ver­ify whether govern­ment help for the re­struc­tur­ing of Cyprus Air­ways with EUR 103 mln is in line with EU state aid rules.

Al­though it is not known when the Com­mis­sion will de­cide on the is­sue, An­to­niou said that it would be good to reach an agree­ment be­fore the de­ci­sion.

The air­line is 93.7% owned by the govern­ment, af­ter sev­eral cash in­jec­tions and rights is­sues and 6.3% is held by lo­cal in­vestors.

In De­cem­ber

2013,

the

govern­ment

no­ti­fied

the Com­mis­sion of a EUR 102.9 mln aid pack­age to re­struc­ture Cyprus Air­ways, which in­cludes a EUR 31.3 mln cap­i­tal in­jec­tion granted in 2012, a con­ver­sion of debts into eq­uity amount­ing to EUR 63 mln and EUR 8.6 mln to cover the deficit of the com­pany’s staff pen­sion fund, ex­clud­ing pi­lots.

The Com­mis­sion re­port­edly has doubts whether the re­struc­tur­ing plan is suit­able to en­sure Cyprus Air­ways’ longterm vi­a­bil­ity and whether the air­line is ca­pa­ble of with­stand­ing likely chal­lenges in the air trans­port mar­ket dur­ing the next years.

The air­line also an­nounced that on Septem­ber 14 it will start flights to Lon­don Stansted air­port, af­ter the sale of the com­pany’s Heathrow air­port slot for $31 mln to en­hance its liq­uid­ity and on­go­ing cost-cut­ting plan that in­cludes re­dun­dan­cies and sale of as­sets.

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