MPs on Monday said they required additional financial data on the state of CyTA Hellas, the Greek arm of the national telco, before giving the nod to a government request to fund studies on how to privatise the loss-making entity.
The House finance committee was discussing a government request for the release of funds for the remuneration of the Privatisation Commissioner and the Privatisation Unit, as well as funds for the services of consultants who would be proposing the best method of denationalising CyTA Hellas.
Lawmakers said they would decide next week on whether to approve the funds.
The sale of CyTA Hellas is to be carried out independently of plans to privatise the national telco.
CyTA Hellas has been bleeding ever since it was established in 2007, requiring repeated cash injections from the parent company. To date, CyTA has funnelled an estimated €200 million into its subsidiary.
The company, which offers broadband and telephony services in Greece, currently employs 766 people, of whom 686 are full time workers.
DISY MP Onoufrios Koullas said it was important to expedite the subsidiary’s sale, given that each day the parent company was losing value due to declining market share.
At the same time, he added, parliament should look into the reasons why CyTA Hellas was established in the first place and why this investment did not pay off.
Anna Theologou, an MP with the Citizens Alliance, voiced concerns over the apparent lack of transparency relating to the fees earmarked for the privatisation consultants.
It was their understanding, she said, that the finance ministry had requested some €900,000 to hire experts to consult the government on how to privatise the whole of CyTA.
Now, she observed, the same amount was being requested for consultants on the privatisation of CyTA Hellas alone.
According to the recent decision to divest of CyTA Hellas, as published in the government gazette, “the privatisation of CyTA Hellas shall be carried out via the sale of 100 per cent of the company’s shares to a natural or legal person through a competition inviting expressions of interest from investors.”
Theologou said that “serious matters are being raised concerning the rush to denationalise the company [CyTA Hellas], but also the method of privatising it. No other scenarios have been examined other than the 100 per cent sale of the company.”
She suggested that the auditor-general engage with the issue.
At the end of 2015, CyTA Hellas posted a negative working capital – its liabilities exceeded its assets – of €50.1 million, indicating it was unable to meet its obligations without financial support from the parent company.
The company’s equity at end-2015 was €145.9 million.
Meanwhile the privatisation of CyTA itself has been put on hold until January 2018, following legislation which opposition parties rammed through parliament in April of this year.
Under the terms of an international bailout, Cyprus has to raise €1.4 billion by selling off state-owned companies in sectors including telecoms, energy and ports.
