The bill for the privatisation of the Cyprus Stock Exchange (CSE) heads to plenary following article-by-article discussion in the House Finance Committee on Monday. The revised text places greater emphasis on incorporating qualitative criteria in assessing prospective investors, beyond purely financial offers.
The Finance Ministry representative, Avgi Lapathiotis, clarified that the state retains the option to remain a shareholder if desired, under the proposed legal framework.
Updated evaluation process detailed
The Ministry incorporated strong positions from the CSE and the Committee on including qualitative criteria. After consultations involving the Finance Ministry, the State Aid Control Office, and the CSE, the process was revised to weigh qualitative factors alongside financial ones.
Specifically, the business plan submitted by eligible investors will carry 30% weight in the overall score, while the financial offer holds 70%.
Eligibility and business plan requirements
Initial eligibility criteria for determining the strategic investor remain unchanged. Tender documents will include additional criteria such as the investor’s share capital, total revenues, average cash flows, and profitability over the last three years.
Business plans must outline intentions for developing the stock market over the next five years and will be binding as an annex to the sale agreement.
Public interest safeguards added
The bill now allows exclusion of any strategic investor for reasons of public interest, as noted by Finance Committee Chair DISY MP Christiana Erotokritou. This aligns with existing law on controlling direct foreign investments.
Tax Department representatives proposed extending the state’s tax exemption on its CSE stake sale to future disposals if it retains shares now. The Law Office confirmed this is already covered in the current wording.
Stakeholder approvals and labour security
CSE Board Chair Marinos Christodoulides expressed full agreement with the changes and hopes for swift passage. State Aid Controller Stella Michaelidou endorsed the 70%-30% split, stressing transparency in final evaluations, with financial bids dominant amid strict prerequisites.
CSE union reps confirmed labour issues resolved first, securing staff via agreement with the Finance Minister.
Committee chair satisfaction
Erotokritou voiced particular satisfaction with the changes and consultations bridging differences, reflecting September concerns. “We care less about the amount than how and what gets invested in the CSE post-sale, not momentary state revenue,” she said.
The revisions ensure attracting investors with guarantees for substantive, attractive plans for the CSE.
Party positions supportive
DISY MP Onoufrios Koullas welcomed improvements aligning with their requests, deeming the bill satisfactory. Fellow DISY MP Savvia Orphanidou noted qualitative weighting selects the most beneficial – not lowest – offer, with concerns addressed.
AKEL MP Andros Kavkalias sought clearer minimum conditions; Law Office reps said these belong in tender terms, not law. Post-meeting, he distinguished CSE as a special institution from typical privatisations, with AKEL deciding in coming weeks.
DIKO MP Chrysis Pantelides announced imminent plenary referral, vital for CSE, Cypriot economy, and market. Priority lies not in short-term gains but handing CSE to a larger entity committed to investing and elevating it maximally.
DIPA MP Alekos Tryfonides highlighted staff protections, preferring more qualitative weight: “We want quality investors and plans, not just financial.”
Ecologists’ Movement leader Stavros Papadouris called the text improved, agreeing with proposals. On resale to third parties, CSE Chair noted CySEC oversight as a private firm post-privatisation; CySEC rep added new investors assessed per EU directive.
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