Daily Press Review - 11/12/2018

In today’s press:

Share capital increase by end of March 2019

Hellenic Bank announced yesterday that its Board of Directors will meet on 18 December to examine the Group’s financial results for the nine-month period ended 30 September 2018. The 9M 2018 Results will be announced to the CSE and the CySEC on 19 December, before the opening of the market. As for the expected completion of the capital raise, HB said that as per its decision at the EGM on 22 August, it is proceeding with a capital increase by way of a pre-emptive rights issue as well as a private placement to Poppy Sarl. HB will issue a prospectus in connection with the capital raise, while will include the 9M 2018 financial. “As a result, the issue of the Prospectus and, therefore, the Capital Raise will be delayed, in relation to what was previously communicated. It is the current expectation that the Capital Raise will be completed by 31 March 2019,” said the bank. It added that it will keep investors informed of any developments relating to the timing of the Capital Raise as required by applicable laws and regulations.

Hellenic Bank is preparing to announce increased profits

As above, with Haravgi newspaper referring to a previous announcement by HB that it is expecting to announce significantly higher profits than previous corresponding periods. In last year’s 9M results, Hellenic recorded profits of €5.1m. In the first half of this year, the bank announced profits of €35.3m, compared with €22.9m losses in H1 of 2017.

State to sell 51.07% stake in Forest Industries

The Republic of Cyprus has hired Global Capital as its advisor for the sale of its shares in the CSE-listed Cyprus Forest Industries Public Ltd. The state is the main shareholder, with 51.07%, while the other two main shareholders are CLR Private Equity with 13.5% and Hellenic Bank with 5.30%. According to Politis newspaper’s sources, the potential investors will be sought out through an open tender process and the transaction will proceed if the price is right and in line with the value of the company. Its current stock market value is quite low, but it has significant assets worth €121m. The Forest Industries’ sales have been picking up, reaching €4,658,667 in the first half of 2018, compared with €4,440,188 in the same period of 2017 (up 4.92%). The same advisor has been hired to advise the state on the sale of €1m’s worth of shares the Republic owns in Hellenic Bank.

SYPRODAT – ‘No’ to Estia if excessive charges are not removed

The Cyprus Banks Borrowers Protection Association (SYPRODAT) is urging borrowers not to participate in the Estia scheme, if the banks do not remove the excessive charges they imposed on the loans prior to the scheme’s implementation. In an announcement, the association said that Estia does not benefit borrowers but instead the banks, as it sponsors them at the expense of taxpayers; they say 1/3 of the loan will be written off, but this is the value of the banks’ unconventional and arbitrary excessive charges, it said. So, if the banks do not remove the excessive charges, then borrowers should not participate as besides, they will be deemed non-viable by the banks. “The Banks will do whatever they want,” it said. Furthermore, it added, those who join Estia will pay a margin of 2.5% and a 6-month Euribor, which means the interest rate will be between 2.5% and 3.5%. “This means that the borrowers who join will pay more interest than the legal limit, as the Euribor is negative and is predicted to remain negative for many years. Again, it is the Bank who are the winners.” It said it has sent the banks’ auditors (including Hellenic’s KPMG Ltd) a letter analysing its views, stressing how the banks’ results should show a true and fair picture for their shareholders and the supervisory authorities.

DISY will ‘cross’ Estia too

Phileleftheros newspaper cites sources to report that AKEL, EDEK and the Green Party intend to table an amendment at this Friday’s House Plenum, crossing the funds for the €33m Estia plan. The paper learns that even ruling DISY, along with DIKO, ELAM and Solidarity, will vote in favour of the amendment.

Solidarity Fund

The government intends to transfer assets worth €100m to the Solidarity Fund that will compensate those who suffered losses from the bailout back in 2013, the House Finance Committee was told yesterday. During the meeting, AKEL MP Stefanos Stefanou raised the issue of whether the relevant bill is constitutional or not, as the Attorney-general’s advice was not sought. The State Aid Commissioner said there was not an issue of state sponsorship to cover losses of natural persons, as this did not concern financial activity; though he did add that the management of the assets that will be granted should be checked in the future.

Hilton sale to be decided

Whether the Hilton Hotel in Nicosia will change hands will become clear in a matter of days, as its current owner MIG continues the procedure it launched to sell it. Binding offers were submitted last Wednesday and they are currently being assessed. From information it has gathered, Phileleftheros newspaper found that none of Cyprus’ big hotel groups have shown an interest, but instead land developers and foreign investors and investment funds.

AKEL proposal to protect public wealth

A battle is currently underway, both inside and outside of the House, to prevent the privatisation of state telecoms company Cyta as well as other profitable public organisations, Haravgi newspaper reports. Following the government’s decision to place the organisations’ privatisation as a priority for the 2019 state budget, main opposition AKEL yesterday tabled an amendment aimed at safeguarding public wealth. Specifically, the amendment called for a “full cut of any expenditure included in the 2019 State Budget, relating to the denationalisation/privatisation of public organisations and state businesses, government departments and services, as well as the alienation of state assets”.

€69m for law firms alone

The 233 providers of services for investors to receive citizenship-by-investment have earned at least €69m from May 2013 until August 2018. In that time, 2,389 applications have been handled; though there is no indication of how many applications were rejected. The numbers were sent to the House by the Interior Ministry. Politis newspaper reports that taking into consideration that firms charge investors around €30,000 to €50,000 to process an application, it is estimated that around €69m was earned collectively by the 233 such providers. The law firms connected to politically exposed persons stand out, with the Nicos Anastasiades law firm processing 41 applications, and the firm of the House President’s son-in-law processing 112 applications.

New Vasilikos Industrial Port counted among unfulfilled commitments too

It looks like the new Industrial Port of Vasilikos is yet another government commitment that will remain unfulfilled, Haravgi newspaper reports, as the Cabinet decisions announced last February have proved to be non-implementable. This, it said, can be derived from the response the Transport, Communications and Works Minister gave to Green Party MP George Perdikis’ question over whether Cyprus was at risk of being left without a clearly commercial port under the management of the Cyprus Ports Authority, following the privatisation of Limassol port and the upcoming concession of Larnaca port. The minister said that it will take five years to build the new port. And she said this was an indicative and not binding timeframe, taking into account that it will take 18 months to carry out the tender process and find an investor, six months to carry out the studies for the construction works and 35 months for the construction works. This, says the paper, shows that the Cabinet announcement that the new port would be ready by 2021 was not realistic.

Nicosia casino launched – Larnaca next

The Cyprus Casino Nicosia has opened its doors to the public, and is located in Engomi, opposite the Hilton Park hotel. The capital’s casino is the second legal casino in the Republic of Cyprus, since the temporary casino in Limassol has been operating since last summer, and will remain open until the erection and operation of the comprehensive casino-resort. The Nicosia satellite casino will have 50 slot machines and 5 gaming tables. It will be the only satellite casino to have gaming tables. It is noted, that in the beginning of next week, Larnaca’s casino will also be launched, located in the city’s international airport. The satellite casino of Nicosia will not operate on a 24-hour basis, like the Limassol temporary casino but will have specific opening hours, which will be announced over the next few days, with announcements by Integrated Casino Resorts Cyprus Limited (ICRC). Politis reports that the consortium consists of Melco Resorts & Entertainment Limited and Cyprus Phassouri (Zakaki) Limited, part of the CNS group. Melco International Development Ltd was founded in 1910 and is one of the first 100 companies of Hong Kong. Today, under the leadership of its CEO, Laurence Ho, the Melco Group leads the field of entertainment, with presence in China, Philippines and Russia. Melco Group is the majority shareholder of Melco Resorts & Entertainment Limited (NASDAQ, symbol “MLCO), which develops, owns and manages casino-resorts in Asia, enhancing the Group’s financial position and creating development opportunities in Macau, Asia as well as worldwide. The company Cyprus Phassouri (Zakaki) Limited (“CPZL”) is part of the CNS Group, which operates in the field of real estate, telecommunications, dairy products, agriculture, exports and mining in Cyprus.

OPAP Cyprus sponsorship

At a ceremony on 6 December 2018, OPAP Cyprus gave its annual corporate sponsorship to Cyprus’ refugee and rural sports clubs. This follows a multi-year support by OPAP Cyprus, recognising the importance of the clubs’ role as well as the difficulties that they are facing.

Another €16m in government amendments

The government submitted to the Parliament, amendments on the initial budget for 2019, amounting to €16m. A relevant discussion on the amendments that include among other, new job positions, purchase of advisory services and the upgrade and/or erection of state buildings and town-planning projects, was conducted during yesterday’s Finance Committee meeting. 46 government amendments were submitted to the Parliament on the 3rd of December, while two more were submitted yesterday and concern the Estia Scheme for primary residences and the Asylum Service. The discussion on the state budget for 2019, starts tomorrow while it will be voted on Friday.

Disciplinary investigation against Louis Panayi underway

Phileleftheros reports that it took 4 months to find a senior public official that would conduct the disciplinary investigation that the Council of Ministerσ ordered against the Director of Pharmaceutical Services, Louis Panayi. The newspaper notes that the Finance Ministry’s permanent secretary denied conducting the investigation, without explanation. The Disciplinary Investigation was ordered after a relevant probe by Auditor-General Odysseas Michaelides, based on information that Panayi himself submitted, during a discussion at the Parliamentary Committee on Development Plans and Public Expenditure Control. Panayi is under investigation for a conflict of interests after renting a space for the needs of the Pharmaceutical Services, in a building where some of his close relatives bought an apartment. The investigation was finally assigned to the Director of the Clinic/Department of Cardiology of the Larnaca Hospital, Michael Myriantheas and the final report will be issued on 14/1/2019.

HIO and CMA go their separate ways

The Health Insurance Organisation and Cyprus Medical Association are going their separate ways, since the Organisation does not have any more to give to doctors and doctors are insisting on the requirements they set for their participation in the NHS, saying they will turn to justice to satisfy their demand to practise private medicine under the System. On Thursday there will be a new meeting between the HIO and the representatives of pharmaceutical companies and importers in order to continue their negotiation. As it is known, there companies and importers have already expressed their concern about the available budget for medication. However, it seems that there are still convergences regarding the HIO’s propositions for the refunds the pharmaceutical providers will receive from the Organisation for the services they will offer to the System. In the meantime, regulations on pharmacists’ participation and pharmacies’ operation are still pending.

OKYpY will offer tempting contracts to public doctors

The next fifteen days are crucial for hospitals’ autonomy. The most important pending matters are structure and hierarchy in the various hospital departments following their autonomy and the contracts that the Organisation of State Healthcare Services (OKYpY) will offer to those who will be employed in public hospitals in the future but also to today’s employees in the public health sector. During yesterday’s meeting, doctors and nurses were informed that the registers of 5,000 employees’ secondments to public hospitals have already been prepared, while the Public Service Commission will carry out the secondments for permanent public employees and contract workers. The secondment is going to take place on 1 January and from 2 January the contracts will be given, with employees having 18 months at their disposal in order to decide whether they will accept or reject them and will remain public employees.

Autonomy is urgent

The contacts have begun between the Organisation of State Healthcare Services (OKYpY) with workers’ trade-unions in public hospitals aimed at completing the dialogue so the autonomisation procedure can begin, within a limited time-frame. Contracts and structures are the main matters that concern employees, while at the same time there are concerns in relation to the tight time-frame they have. Regarding permanent public employees, the secondments will be carried out by the Public Service Commission and for contract workers by the Ministry of Health. According to the Legislation, the secondment will take place on 1 January and on 2 January the contracts will be given, for which employees will have 18 months to decide on whether they will accept them or continue with the public worker’s regime.

Efforts to improve services for thalassaemia patients

Health Minister Constantinos Ioannou said that the Ministry will make every possible effort to improve and provide the appropriate tools to doctors and other healthcare professionals and researchers in order to upgrade the services offered to thalassaemia patients. He said that the goal is to reduce the birth of children with thalassaemia and ensure the radical treatment of the condition, and thus stakeholders need to collaborate to prepare protocols and promote programmes for prevention, as well as research programmes which relate to new treatment methods.

Grey clouds over NHS

The NHS implementation process is not progressing well despite the efforts, Haravgi reporter Eleni Constantinou comments. Latest developments show that nothing is perfect and this is why the Cyprus Medical Association has decided to turn to justice in relation to the free practise of private medicine within the System. What needs to be taken into account is that no doctor is obliged to join the NHS. Anyone can make their own choice to not be included and to practise private medicine. What is important is for the regulations not to create two different types of patients, she writes.