By Jean Christou
THE GOVERNMENT has failed to offload the ten per cent of Cyprus Airways (CY) shares that it is required to sell under Stock Exchange regulations, it announced yesterday.
Yesterday was the deadline for offers on the five million shares made available by public offering two weeks ago, but investors have kept well away.
Under CSE regulations, the shares must be sold by September 1999 to reduce the government’s 80 per cent shareholding in the airline.
The nominal value of the shares is 50 cents, but the government’s offer was a minimum 45 cents per share.
CY shares closed slightly down yesterday at 47 cents.
An official announcement said there had been “limited interest and that “no one had to be turned back”.
Neither the government nor the company were willing to reveal how many of the shares had remained unsold in a fiasco that a Nicosia stockbroker yesterday described as a “disgrace”.
Neophytos Neophytou of United Stock Brokers told the Cyprus Mail that his firm dealt with a lot of institutional investors, none of which had expressed any interest in Cyprus Airways shares.
Yesterday’s government announcement blamed Thursday’s four-hour strike action, announced weeks ago by the airline’s biggest union Cynika.
“It is obvious that the strike measures the union called affected the sale process,” the government announcement said.
“Different scenarios and choices are being discussed by the government side to try and comply with the CSE regulations by September 1999.”
But Neophytou said blame could not be pinned on the strike alone.
“No serious investor would express much interest with what is going on there,” he said. “Nobody wants to inherit the situation.”
The Nicosia stockbroker said it appeared that no restructuring had been carried out to ensure the airline’s future and that the liberalisation of air transport would cause major problems to the national carrier.
“You also have to consider the fact that Cyprus Airways is only profiting from two routes, Athens and London,” he said. “Personally I feel it is not a good investment.”
Diko deputy Tassos Papadopoulos was even more blunt when he spoke earlier yesterday about privatisation in general.
“The private sector is not fooled. What government is going to manage to sell shares in a loss-making company like Cyprus Airways? The private sector would have to be run by fools or people who don’t know about business for them to buy into loss-making companies. Who will buy a company that has no prospects?”
Communications Minister Leontios Ierodiaconou, also speaking on issues of privatisation and specifically on Cyprus Airways’ current industrial disputes, said: “With these problems they can’t attain full liberalisation, which will happen in the near future.”
He called on the unions to work with the company on how to address weaknesses so that the company could become more efficient and more competitive.
Ierodiaconou said that four or five overseas companies had expressed an interest in the airline. “We are not ready to accept offers,” he said. “This might happen in six months or more.”
CY spokesman Tassos Angelis did not wish to comment on the shares issue. And he said there had been no developments on prospects for solving the industrial dispute with Cynika.
The union is due to meet on Monday to discuss further measures in its bid for pay rises.
