Bloomberg News

Cyprus Airways Says It’s Not Received Any Concrete Buyout Offers

February 09, 2012

Feb. 9 (Bloomberg) -- Cyprus Airways Ltd., the east Mediterranean island’s loss-making airline, said it hasn’t received any concrete buyout proposals from investors.

Kathimerini newspaper reported yesterday that Russia’s OAO Aeroflot has started talks on acquiring a stake that are at an “advanced stage,” while Lebanon’s Middle East Air Airlines has also shown interest in buying a holding in the carrier. The paper didn’t say where it got the information.

The state-run company, in which the Cypriot government has a 70 percent stake, said in an e-mailed statement today that no investor, including Russia’s Aeroflot, Lebanon’s Middle East Airlines and “the state of Qatar,” expressed any interest so far. In a separate statement, the airline said that it entered into a code-share agreement with the Lebanese carrier.

Cyprus’s Cabinet gave the company the green light to increase its capital yesterday and announced its intention to participate in it. It also said that it would consider offers for the sale of an unspecified stake in the company.

Last year, the airline, which posted 29.3 million euros ($39 million) in losses in the first half of 2011, received 20 million euros in compensation from the Cypriot government for extra costs incurred as a result of Turkey’s ban on Cypriot traffic and underwent a restructuring plan in an attempt to save 40 million euros annually.

Cyprus Stock Exchange suspended trading of the shares of the ailing carrier pending clarifications of its financial condition following press reports, according to a statement on the CSE’s website. The company’s share rose 6.7 percent yesterday to 0.08 cents, valuing the company at 31.3 million euros.

--Editors: Zoe Schneeweiss, Jeffrey Donovan

To contact the reporter on this story: Stelios Orphanides in Nicosia at sorphanides@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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