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Cyprus: Asian investor interested in buying bonds

By Menelaos Hadjicostis

Associated Press

Published: Friday, March 2 2012 6:15 a.m. MST

A passenger waits for his flight at Larnaca international airport, Larnaca, Cyprus, Friday, March 2, 2012. Cyprus air traffic controllers will walk off the job for four hours on Friday to protest stalled negotiations over an ongoing pay dispute, officials said.

Petros Karadjias, Associated Press

NICOSIA, Cyprus — An Asian investor is interested in buying around €500 million ($665 million) worth of Cypriot bonds, Cyprus' finance minister said Friday, in a welcome development for a country keen to reverse its credit rating's slide into junk territory.

Minister Kikis Kazamias said he would hold talks with the investor, who will travel to the island later Friday. Kazamias didn't name the investor but Cypriot media have identified him as Reignwood Group Chairman Dr. Chanchai Ruayrungruang.

Kazamias said the investor is among many interested in investing in Cyprus which effectively cannot borrow from international markets because of its near-junk credit rating due to its banks' heavy exposure to Greek debt.

Cyprus, which is one of the 17 countries that use the euro, is relying on a €2.5 billion ($3.36 billion) low-interest Russian loan to pay its bills this year.

Kazamias said restoring slumping investor confidence is a key priority for his ministry and that he would consider it a success if Cyprus can start borrowing again from the markets before the end of the year.

"Until then, we are obligated as a state to manage our public finances in such a way so that won't meet any difficulty in financing our needs," he said.

Cyprus is counting on the discovery of a sizable quantity of gas off its southern coast to attract foreign investment. Officials estimate the find is enough to meet domestic energy needs for decades.

Meanwhile, Cyprus air traffic controllers walked off the job for four hours Friday amid stalled negotiations over an ongoing pay dispute.

Cyprus Air Traffic Controllers' Union boss Giorgos Georgiou said the work stoppage was in response to what he says was the government's unwillingness to address the union's grievances over salary cuts before agreeing on ways to lessen the impact of future strike action.

He said air traffic controllers will stage another three walkouts of equal duration by the middle of this month unless the government changes tack.

The strike affected some 20 flights to and from the island's two international airports.

Air traffic controllers insist they should be exempt from austerity measures aimed at curtailing spending on the bloated public sector. They say their salaries don't burden the state budget because they come from levies airlines pay to use Cyprus-controlled airspace.

Communications Minister Efthymios Flourentzou said the walkout is hurting the economy and urged air traffic controllers to resume talks on all issues that concern them, including overtime pay.

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