The preferred method for the privatisation of the Cyprus Stock Exchange (CSE) should be an open and transparent tender with equal access to information and without conditions that could depress the sale price, State Aid Commissioner Stella Michailidou has said.
In statements to CNA, Michailidou emphasised that any conditions attached to the privatisation process must be assessed by her Office under EU state aid rules, and, if necessary, by the European Commission itself.
“The imposition of terms in the company's sale, which a private investor would not set, justifies the presumption of state aid,” she said, noting that sales should always aim to reflect fair market value.
She noted the importance of an independent valuation by a certified body to determine the CSE’s fair value, cautioning against underpriced sales. Post-sale conditions, she added, should be avoided in the case of full privatization, while the state retaining a minority stake would allow continued oversight of the exchange’s role in the Cypriot economy.
Michailidou explained that risks of state aid arise if a privatization involves sales below market value, closed or discriminatory tenders, favorable terms for the buyer such as tax breaks or guarantees, debt write-offs, or obligations of a political or social nature that a private investor would not accept.
She recommended that if terms are included in the tender or enabling legislation, they must be reviewed by her Office and, where appropriate, preliminarily notified to the European Commission for legal certainty.
“EU law encourages member states to maximize revenues and ensure legal security through open, competitive tenders,” Michailidou said, stressing adherence to the Market Economy Investor Principle.
(Source: CNA)
