European Commission authorizes Cyprus Airways’ restructuring plan
Nicosia, Mar 7 - The European Commission has authorized the restructuring plan proposed by the Cyprus Government to restore the viability of Cyprus Airways, the island’s national carrier.
''The Commission has today found compatible with the common market the restructuring plan proposed by the Republic of Cyprus in order to restore the viability of Cyprus Airways. Following an in-depth investigation, the Commission has decided that the plan is in line with the Community rules regarding the rescue and restructuring of firms in difficulty,'' a press release by the European Commission said.
The restructuring plan, submitted to the European Commission in November 2005, includes a loan in the sum of CYP 55 million (USD 124 million) of which CYP 45 million (USD 102 million) is backed by government guarantee, the sale of Cyprus Airway’s charter arm, Eurocypria, to the government for 13.4 million (USD 30 million).
The plan also provided for ongoing cost cutting necessary to restore the airline's viability and a capital increase of CYP 14 million (USD 32 million) involving public and private shareholders.
Cyprus Minister of Finance Michalis Sarris said that the approval of the restructuring plan was a positive development.
The Minister also called on all involved, the Cyprus Airways administration, the company’s Board of Directors as well as the CA employees, ''to continue showing the same positive approach and to intensify their efforts so that the company becomes profitable once again”.