By Stelios Orphanides
BANK of Cyprus refuted claims by tourist group Aqua Sol published in a report in Phileleftheros yesterday that the hotel chain and nine other affiliate companies had blocked the appointment of Eleftherios Philippou as receiver, a bank official said.
“The appointment of a receiver has not been blocked; it is incorrect to state that,” Euan Hamilton, the bank’s head of restructuring and recoveries told the Cyprus Mail. “Philippou is still legally appointed and in office as the receiver-manager”.
The newspaper reported on its website yesterday, citing the Aqua Sol Group owner Yiannis Panayi, that the court did not confirm the receivership order while the company successfully disputed the legality of the appointment of a receiver. Philippou was unavailable for comment.
BoC appointed a receiver without warning and in defiance of the central bank’s code of conduct, while the two sides were engaged in restructuring talks, Phileleftheros quoted Panayi as saying.
Hamilton, said that BoC “remains committed to reaching consensual restructurings with all clients facing financial difficulties and the appointment of a receiver-manager is and always will be the last resort”.
The former Royal Bank of Scotland executive, who joined the largest Cypriot lender less than a year ago, did not rule out concurrent restructuring talks while Aqua Sol is in receivership.
A bank official said, on condition of anonymity, that the hotel group’s overall outstanding debt to the bank is almost €200m.
According to a June 2013 BoC internal report leaked to the press, Aqua Sol had been extended total credit worth €99m, of which €23m were in arrears, while approximately €9m was over 90 days due. The company, which is the bank’s second major client to be placed in receivership following last year’s banking crisis, was deemed a ‘high-risk’ borrower as its loans were restructured on an annual basis.
In addition to property collateral, in 2009 Aqua Sol had issued €70m worth of company securities as collateral to the bank, which allowed it to place the company under administration in case of non-payment.
An Aqua Sol official, who declined to be identified, told the Cyprus Mail that the company continues to operate as usual and that the receiver had not taken over in charge. He added that Aqua Sol continues to be profitable.
“We can find solutions which will allow us to service our loans,” the Aqua Sol official said.
Bank of Cyprus’s Hamilton declined to comment on Aqua Sol’s ability to generate profit, citing reasons relating to confidentiality.
