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New investors for Cyprus Airways found

27 June 2014

Cyprus Airways’ attempts to find a strategic investor should be concluded soon. The stricken national flag carrier is under pressure from the European Commission as regards state aid to the company, CNA reports.

Board chairman Tony Antoniou told CNA that there is particular interest from potential investors who have signed confidentiality contracts with the company.

Any interest is being handled by the Ministerial Committee for Cyprus Airways consisting by the Minister of Finance, the Minister of Energy, the Accountant General and the Chairman of the Board of the company.

“There is interest. With the right work and cooperation with our consultants and the Government I am optimistic that we can end up to potential investors”, said Antoniou.

He added that the process was near the end and should be concluded as soon as possible.

The European Commission has opened an in-depth investigation to verify whether state support of the restructuring of Cyprus Airways with €102 million is in line with EU state aid rules.

Although it is not yet known when the Commission will decide on the issue, Antoniou said that it would be good to reach an agreement before the decision. Antoniou told CAN that if the answer is positive, they will need investors to support the growth of the company. If the answer is negative, then the company needs investors that will help it develop an alternative plan.

At the same time, the company announced that on 14th September will start flights to London Stansted airport, after the sale of the company’s Heathrow airport slot for 31 million dollars to enhance its liquidity.

In December 2013, Cyprus notified the Commission of a € 102.9 million aid package to restructure the national flag carrier Cyprus Airways, which has experienced financial difficulties for several years. The restructuring plan runs from 2012 to 2017.

The plan includes a € 31.3 million capital injection granted in 2012, a conversion of debts of the company into equity amounting to € 63 million and € 8.6 million to cover the deficit of the company`s Provident Fund, a benefit scheme for the Cyprus-based employees (excluding pilots), financed through contributions from the employees and Cyprus Airways.

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