CYPRUS Airways (CY) yesterday denied allegations that factions within the national carrier were trying to scupper negotiations with a buyer for its loss-making Athens-based carrier Hellas Jet.
Reports yesterday said that lawyers for an interested investor had been given the run around during negotiations with the national carrier, which is seeking to offload the airline due to losses of £1 million a month.
Hellas Jet was set up in June 2003 and has contributed greatly to CY’s losses for the past 18 months. Part of a strategic plan to save CY provides that a solution must be found to stop the Athens-based carrier bleeding it dry.
The company has been in talks with various investors for some time. It recently turned down an offer to lease Hellas Jet’s fleet to private Cypriot carrier Helios Airways, saying it was looking at several options.
Simerini newspaper alleged yesterday that moves were under way to bring the company down altogether and that potential investors were being misled.
The paper said that one particular proposal had been well received by the CY board in December, but when negotiations actually started the investors was being blocked at every turn.
The paper said an unnamed businessman had made a proposal through his lawyers for the 100 per cent purchase of Hellas Jet on December 6, which was to go to the board on December 10.
On that day, the lawyer’s office said it had received a phone call from Hellas Jet management expressing interest in the proposal and fixing a meeting for December 14, when the lawyers’ office gave its proposal.
However, by December 21, the lawyer’s office claimed in a letter to the company that there had been efforts to scupper the negotiations by a third party and that if the investor was not given an answer by January 24, it would withdraw its offer.
Cyprus Airways said yesterday the allegations were groundless and that it wanted to set the record straight.
CY said the Simerini report had omitted substantial aspects of the communiqués between Hellas Jet and the office of the lawyer acting on behalf of the investor.
The airline denied that there had been any “dragging of feet” by CY on the issue. “On the contrary we gave the lawyer’s office all the information they asked for so that their clients could submit their offer,” CY said.
“We would also like to point out that the lawyer’s office knew we were in negotiations with other interested investors. However, they insisted that the other bidders be excluded from the competition and they didn’t even reveal the identity of the investors they represented.”
CY said the investors didn’t reveal how much money they were offering, and were also giving the airline very tight deadlines.
“Under these conditions, it was impossible to accept their demands because they wanted exclusivity in the negotiations so we couldn’t agree to that,” CY said. “We cannot be held responsible for not accepting ultimatums and vague proposals and deadlines.”
