Foto by by Andy_Mitchell_UK (from Flickr under CC License)
In other news the much smaller Eurocypria has just been saved from bankruptcy from the Cypriot parliament. Eurocypria, a charter flight operator, has found its self in severe financial distress just six years after the company was restructured. The CEO, Eletherios Ioannou, warned the Cypriot parliament that unless the parliament agreed to an immediate increase of the share capital by 35 million euros the company would close by last Friday, since it needed to repay debts of 28 million. The government agreed to the demand, and refused to accept the resignation of the CEO, despite the anger in the local press on the revelation of greatly inflated wages of Eurocypria’s staff: pilots, ground staff where grossly overpaid, with a third of the company earning more that 99,000 euros a year
The largest opposition party, DISI, has come out against the deal, with vice chairman Averof Neophytou, stating that “the government is trying to convince parliament that Eurocypria is viable and the Cypriot taxpayer should invest €35 million” but “If they really believe in what they are telling us, it would be very easy to convince their former colleagues, either to renew the loans or the creditors can participate in increasing the share capital.”. The most criticized aspect of the deal is the fact that Eurocypria seems to be moving out of the charter business and will start to offer direct flights to Kenya and Teheran from the new Larnaca airport.
European rules may block the deal since the local government owned rival, Cyprus Airways, which was wrangling with Eurocypria over who will remain as the republic’s sole carrier, seems to be behind the anonymous a legal suit placed on February 17 with the European Commission regarding the proposed financing of Eurocypria. The news of the possible imminent collapse of the charter flight carrier has rocked confidence of the Cypriot hotel business, since many tourists in Cyprus still travel with charter flights operated by Eurocypria, and dampened the positive spirit created for the upcoming tourist season by the the opening of the new Larnaca airport
Alexander Apostolides
1 comments:
The company in the end went bust, 3 months after it was given 35 million. It is turning into a major scandal in the Cypriot government as all the notes surrounding the council's of ministers decision to give the money which seemed all went to the Banks that were the company's creditors.
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