Cyprus is obliged to sell the dominant telecoms provider by the end of the year according the timetable set by the Memorandum of Understanding the country signed with international lenders during the crisis in 2013.
“There is interest both from Russians and from countries of our region,” a person familiar with the issue told the press. “Nevertheless, it is too early to say more about how serious their interest is.”
Missed opportunity
This is not the first time that Russian investors have shown interest in CYTA. Russian and Chinese investors were considering CYTA and other Cypriot assets when the country was looking for bailout under the Christofias administration (2008-2013).
However, the then government was reluctant to sell, according to a source close to the Christofias administration at the time.
“Those were the days when we should have sold CYTA. Now we will not be able to get the same price. We missed an opportunity to offer part of the CYTA stake to customers and employees,” he said.
Apart from CYTA, Cyprus is due to sell the Limassol Port and the Electricity Authority of Cyprus in an effort to raise as much as €1.4 billion under the bailout deal.
Getting it through parliament
Timing of the CYTA privatisation is uncertain as the minority government has yet to persuade members of parliament (MPs) and the unions to allow it to proceed. Nevertheless, the government has been encouraged by the lack of enthusiasm shown by opposition parties to the proposal by left-wing AKEL to freeze the privatisation process until 2017.
Both the centrist DIKO and socialist EDEK dismissed the proposal as inadequate. Without their support, AKEL’s proposal has few chances of succeeding.
In an effort to CYTA persuade staff to accept privatisation, Finance Minister Harris Georgiades has guaranteed that no one will be fired, while staff will be offered four options for continued employment.
Some will remain with the state
CYTA will be split into two parts. The first part will involve the creation of a private telephone company that will incorporate the current state company’s core business.
In other words, it will include landline and mobile telephone and internet services, as well as cable TV.
The government has not decided yet whether to include CYTA Hellas, the subsidiary of the company in Greece, in the same package or to sell it as a separate item.
The publicly owned part of CYTA will continue as a different entity, retaining the remainder of the company’s assets. These will include buildings and premises that are not related to the core business, certain radio services that involve state security state, the Makarios satellite and the marine navigation station in Lakatamia.
Source: InCyprus
