Legislation to privatise the Cyprus Stock Exchange will reach parliament for a plenary vote within the month, despite MPs pushing back against criteria that prioritise the highest bidder over qualitative factors.
The Parliamentary Finance Committee on Monday discussed the fourth revised bill, which adjusts how the government will select the private investor to take over the stock exchange.
MPs voiced strong reservations about the selection criteria, disagreeing with provisions that make the highest offer the decisive factor in choosing the strategic investor. They argued that qualitative characteristics of interested parties should carry greater weight.
Under the revised bill, both qualitative and economic criteria will be considered. Finance Ministry representative Avgi Lapathiotι told the committee that business plans submitted by eligible investors will carry 30% weight in the overall assessment, whilst the financial offer will account for 70%.
Lapathioti said the specific ratio was deemed necessary to align with the broader state aid framework.
“Eligibility criteria remain. The percentages concern the second stage of assessment, whilst the first stage concerns the strategic investor or regulated market (stock exchange),” she said.
The tender documents will include additional eligibility criteria such as average cash flows, profitability over the past three years, total revenues and share capital, she added.
According to Lapathioti, the selected investor will be the one achieving the highest overall score. The business plan will describe the eligible investor’s intentions for developing the stock market over the next five years and will be binding, forming an annex to the sale agreement.
The bill retains the option to exclude any strategic investor from the process if public interest grounds exist, she said.
State Aid Control Commissioner Stella Michaelidou told the committee that in October, the need for an opinion and notification to the European Commission was flagged, as the initial proposal set weighting at 60% for the financial offer and 40% for qualitative characteristics.
The Commissioner’s Office communicated with the Commission on the matter, she said, adding that “the amendment to 70-30 finds us in agreement, as the financial offer has a dominant role and is accompanied by significant prerequisites”.