CYPRUS Airways (CY) will sign a deal to sell its remaining 49 per cent share in Athens-based Hellas Jet some time this week, the national carrier’s chairman Lazaros Savvides said yesterday.
“Our agreement is with a Greek company, which we have been associated with in the past,” Savvides told the Cyprus Mail yesterday. He said he could not disclose how much the deal was worth.
The other company involved is Air Miles, which is owned by Transworld Aviation.
Last May CY signed an agreement with Air Miles for the commercial exploitation of Hellas Jet.
The memorandum of understanding included a call option on Air Miles to acquire 51 per cent of Hellas Jet shares from Cyprus Airways, and for the Cypriot carrier to sell Air Miles its remaining 49 per cent.
CY, which set up Hellas Jet in June 2003, to exploit the Greek market, suspended the airline’s operations in May last year after losing around £1 million a month on the airline, which by the time it stopped flying had cost “50 million.
Also recently CY, which itself is 68 per cent owned by the state, gained approval to sell its profit-making charter firm Eurocypria to the government for £13.4 million.
CY said it had accepted the government’s proposal for the acquisition of 100 per cent of the share capital of its subsidiary. The sale price of £13,425,000 represented the market value of the company, CY said. Currently the legal documents are being examined by the Attorney-general’s office before being signed.
The sale of the two airlines fall under the airline’s restructuring plan, which has been submitted to the European Commission by the Government of the Republic.
Savvides said at the weekend, they expect a response from the Commission in September.
The Commission had raised doubts about the sale of Eurocypria some months ago, suggesting it could be classed as indirect state aid to CY, which is prohibited under EU rules.
The Commission launched a formal investigation.
In May last year the Commission authorised a grant of rescue aid, which took the form of a government-backed loan of £30 million.
CY has since asked for a further loan of £58 million to help implement the restructuring plan, which provides for cutting one third of the workforce, revising routes and the outsourcing of certain services.
The government needs EU approval to guarantee the loan.
