State spokesperson Christos Stylianides has reportedly revealed that the Cypriot government has approved a roadmap for the privatisation of state-owned enterprises (SOEs) and semi-governmental organisations (SGOs), and confirmed that the process will start in 2016, with national telecoms incumbent Cyta the first company to be privatised. According to local news agency Cyprus News Report, Mr Stylianides said that none of the SOEs and SGOs will be 100% privatised, as the government plans to retain a stake in each one.
For its part, Cyta’s board of directors has announced that the current business environment is not suitable for a sell-off, with the economic crisis continuing to pose problems. In a press release, the Cyta outlined plans to ‘immediately proceed with restructuring, aimed at reducing costs’, so that the state ‘will continue to have an asset of increasing value, which can be used in the best possible way without pressure and timeframes.’ Further, Cyta pointed out that it has already ‘made serious preparation in this area and is one step ahead of the restructuring effort, supported by high international firms that specialise in such matters’.
As previously reported by TeleGeography’s CommsUpdate, Cyprus should accumulate around EUR1.4 billion (USD1.93 billion) from the privatisation process. An estimated initial deposit of EUR1.0 billion (USD1.35 billion), and a further EUR400 million must be secured by 2018, according to the terms of the bailout deal struck by the government and international lenders. The Memorandum of Understanding (MoU) signed between the Cypriot authorities and the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF), stipulates that the government should present a privatisation plan for SGOs Cyta, Electricity Authority Cyprus (EAC) and the Port Authority by the end of December 2013.