The proposal was tabled by the chairman of the telecommunications company CyTA and was discussed yesterday with the heads of the electricity authority (EAC) and the ports authority, among others.

“These organisations belong to the people and should remain with the people,” CyTA chairman Stathis Kittis said. “I believe there are ways to mortgage the people’s property, instead of selling it, and provide the state a way out. Kittis said his proposal would be discussed by the boards of the various SGOs and then submitted to the government.

According to the deal struck with international lenders, Cyprus should collect€1.4 billion from privatisations. In a letter to his counterparts, Kittis suggested selling the SGOs was the objective of certain circles inside and outside Cyprus. Kittis proposed setting up an entity where all SGOs will participate according to their assets, which however must not have any encumbrances. Kittis said CyTA and the EAC alone could cover up to €1.2 billion through their immovable property and infrastructure.

The entity will then seek loans from international organisations, mainly from Chinese banks but also from HSBC, BOA/Merrill Lynch, and others which have shown great interest to lend money to credible organisations, Kittis said in his letter. Cash could also be raised by issuing bonds that will be underwritten by one of the large investment banks, he said.

The money will then be granted to the government as the SGO’s share but it will also be considered a down-payment for participating in the natural gas investment, the letter said. “In essence, this share will still be the property of the government,” Kittis said. The CyTA chairman said the link with the natural gas would add weight to the loan request and help secure better terms like lower interest and a grace period of three to four years before staring its repayment.

Source: Cyprus Mail